Manual On CAS For PACS

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT
Department for Cooperative Revival and Reforms (DCRR)
______________________________________________________
NB.DCRR/ 667 /D 3 CAS/2007-08

23 August 2007
Circular No. 157 /DCRR- 15 /2007
The Registrar of Co-operative Societies
Government of --------------------------------------------------------------------------------------------------
Dear Sir
Implementation of Revival Package for STCCSManual on Common Accounting System (CAS) for PACS
As you are aware, guidelines on Common Accounting System(CAS) have been issued
vide Circular No.71/DCRR-04/2007 dated 18.5.07 as suggested under clause 8(b)(ii) of
the MoU executed by the State Government with GoI and NABARD regarding
implementation of Revival Package for the Short Term Cooperative Credit Structure
(STCCS). CAS provides details on maintenance of various books of accounts so as to
facilitate preparation of all prescribed financial statements properly by the PACS.
2.
An operational Manual has now been prepared for easy handling of CAS and a
copy of the Manual is enclosed. The objective of the Manual is to guide the PACS in
maintenance of books of accounts and preparation of financial statements as per CAS
guidelines. The major components of the Manual are:
(i)
(ii)
(iii)
(iv)
(v)
Accounting entries for credit and non-credit activities

Accounting entries for common activities
Formats/steps involved in book keeping etc.,
Maintenance of basic records/registers/books/ledgers/control registers
Steps for preparation of financial statements
3.
As decided in the second meeting of the National Implementing and Monitoring
Committee (NIMC) held on 7 September 2006, the PACS are required to prepare the
financial statements as indicated in the CAS guidelines to ensure consistency,
transparency, data build up and comparability of the PACS while adopting basic and
standard principles of accounting. It may be noted that CAS is the basis for
computerization in PACS, for which, steps are being taken separately. It is suggested that
the CAS must be introduced in the PACS at the earliest, manually to start with, so that the
same gets stabilized within a short period of time before computerization of the society
absorbs it smoothly.
___________________________________________________________________________________________________________________________________
- , (), 400 051 Plot C-24, G-Block, Bandra-Kurla Complex,Bandra (East), Mumbai 400051
Tel ( 022 ) 26530024/26539564
Fax (022 ) 2653 0023
e-mail dcrr@nabard.org

______________________________________________________
4.
We appreciate that training of PACS personnel/staff is essential to equip them for
implementing CAS. With this objective, training modules designed for the Secretaries of
PACS contain extensive sessions on CAS. To facilitate further, the Cooperation and
Audit Departments may be required to provide guidance and handholding to the PACS
staff in the beginning for which NABARD will extend support to the Department as and
when necessary.
5.
We therefore request you to issue suitable instructions to PACS for early
introduction and adoption of CAS with the help of the Manual so that they compulsorily
start generating the financial statements as indicated in the new accounting system from
the current year (2007-08) itself. You may get the Manual translated into local language
for use of PACS, if the same is considered necessary.
Yours faithfully,
(Prakash Bakshi)
Chief General Manager
Encl: As above
___________________________________________________________________________________________________________________________________
Tel ( 022 ) 26530024/26539564
Fax (022 ) 2653 0023

______________________________________________________
Endt. No. NB.DCRR/668/D 3/2007-08 of date
Copy together with enclosures forwarded for information and necessary action to:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
The Joint Secretary (FS), GoI, Ministry of Finance, Deptt. Of Economic

Affairs, Banking Division, Jeevan Deep Building, Parliament Street, New
Delhi-110001
The Chief General Manager, Rural Planning & Credit Department, Reserve
Bank of India, Central Office, Fort, Mumbai 400 001
The EA to Chairman, NABARD, HO, Mumbai
The EA to Managing Director, NABARD, HO, Mumbai
The EAs to all Executive Directors, NABARD, Mumbai/New Delhi
The Chief General Manager, NABARD, All HO Departments, Mumbai
The Managing Director, National Federation of State Coop.Banks Ltd.
(NAFSCOB), J K Chambers, 5th floor, Plot No.76, Sector 17, Vashi, Navi
Mumbai 400703.
The Chief General Manager/Officer-in-Charge, NABARD, All ROs/SOs. He
is requested to arrange for translation of the Manual into local language, if
necessary.
The Principal, National Bank Staff College, Lucknow.
The Principal, Regional Training College, NABARD, Mangalore
The Principal, Regional Training College, NABARD, Bolpur
The Joint Director, BIRD, Lucknow
(A K Sahoo)
Deputy General Manager
___________________________________________________________________________________________________________________________________
Tel ( 022 ) 26530024/26539564
Fax (022 ) 2653 0023
NATIONAL BANK FOR AGRICULTURE AND

RURAL DEVELOPMENT
Department for Cooperative Revival and Reforms
Head Office, Mumbai.
Manual on
Common Accounting System (CAS)
for
Primary Agricultural Credit Societies

(PACS)
Table of Contents
Sr.No.
Contents
Page No.
INTRODUCTION
CHART OF ACCOUNTS
BASIC RECORDS TO BE MAINTAINED BY PACS
BASIC ACCOUNTING PRINCIPLES AND POLICIES
14
STEPS
FOR
STATEMENTS
17
ACCOUNTING ENTRIES FOR CREDIT ACTIVITIES
22
ACCOUNTING
ACTIVITIES
NON-CREDIT
31
ACCOUNTING ENTRIES FOR COMMON ACTIVITIES
36
DEFINITIONS OF ACCOUNTING TERMS
51
10
PREPARATION
ENTRIES
OF
FOR
FINANCIAL
FORMATS / STEPS INVOLVED IN BOOK-KEEPING

APPENDIXES
Appendix 1 Format of Cash / Bank Receipt
Voucher
54
Appendix 2 Format of Cash / Bank Payment

Voucher
55
Appendix 3 Format of Contra Voucher
56
Appendix 4 Format of Purchases Voucher
57
Appendix 5 Format of Sales Voucher
58
Appendix 6 Format of Journal Voucher
59
Appendix 7 Format of Debit Note / Credit Note
60
Appendix 8 Format of Cash Withdrawal Form
61
Appendix 9 Format of Pay-in-Slip
62
Appendix 10 Steps involved in book keeping
66
Annexure I : Trial Balance
81
Annexure II : Trading Account
82
Annexure III : Profit and Loss Account
83
Annexure IV : Balance Sheet
85
List of Abbreviations
89
1
1.1
INTRODUCTION
Background:
As envisaged under the Revival Package of GoI, NABARD in collaboration with

GTZ has devised a Simplified, Standard and Common Accounting System(CAS)
for PACS. While designing the Common Accounting System for PACS, the
existing systems and practices of accounting of the PACS in a number of states
have been studied both under manual and computerised systems having
regard to the nature and scale of business, prudential norms and best
practices in accounting and their relevance to computerization and discussions
held with various stakeholders such as State Cooperative Banks, District
Central Cooperative Banks, Dept of Cooperative Audit, Registrar of Cooperative
Societies and the Training Institutes of Cooperatives. In line with the CAS
prepared for PACS, this operational Accounting Manual (AM) is prepared
to guide PACS in accounting for transactions under Double Entry System Of
Accounting as per Accrual basis.
The major components of CAS are :
i)
Applicability of universally accepted basic concepts and principles in the

maintenance of accounts by the PACS.
ii)
Adoption of standard financial statements, viz., Balance Sheet, P&L A/c

and Trading A/c.
iii)
List of a common set of General Ledger Heads of Account compatible with

financial statements; and
iv)
Maintenance of minimum essential and Standard Books of Accounts
1.2
Purpose:
This manual deals with accounting entries to be passed at various stages along
with the formats of necessary records. While the basic accounting system
along with formats for main registers, subsidiary registers, day books, basic
reports etc. have been dealt by CAS, this manual serves as an operational
guide to PACS in Book-keeping.
This manual read with CAS aims at :
i)
Preparation and processing of accounting transactions, and
ii)
Providing assurance that similar transactions will be accounted for

consistently.
iii)
Transactions are accounted consistently and financial statements are

comparable from period to period.
iv)
Clear understanding of book-keeping under Double Entry system of

accounting under Accrual Basis.
2.
CHART OF ACCOUNTS1
Chart of Accounts is a listing of the names of the accounts that an

organization has identified and made available for recording transactions in its
books. The following chart is designed by CAS for PACS to:
i)
Ensure uniformity and common understanding of accounts;
ii)
Guide in the installation of accounting and internal control systems;
iii)
Enhance transparency; and
iv)
Facilitate the analysis and evaluation of financial and management

performance, monitoring, supervision and business linkages.
CAPITAL
1.
2.
3.
Paid up Capital Individual

Paid up Capital Government
Paid up Capital - Others
RESERVES, FUNDS AND GRANTS

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Reserve Fund
Capital Reserve
Agriculture Credit Stabilization Fund
Dividend Equalization Fund
Building Fund
Common Good Fund
Balance in Profit and Loss Account
Subsidy meant for Society
Subsidy meant for Members
Recapitalisation Assistance Fund Contribution from GoI
Recapitalisation Assistance Fund Contribution from State Govt.
Provident Fund
Other Grants
DEPOSITS
1.
2.
3.
4.
5.
Saving Deposit
Recurring Deposit
Fixed Deposits
Reinvestment Deposits
Other Deposits
BORROWINGS FROM DCCBs/SCB

1.
2.
3.
4.
1
ST (SAO) / KCC Credit Limit

MT/LT Agri Loans
MT Conversion
MT/LT Reschedulement
Adopted from Common Accounting System
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
SHG Loans
Non Farm Sector Loans
Fertilizer Cash Credit Limit
Seeds Cash Credit Limit
Cash Credit Limit for Agriculture Produce
Cash Credit Limit for Gold Loans
Public Distribution Scheme CC Limit
Consumer Commodities CC Limit
Other Non Credit Activities
Loans against Deposits with DCCB / SCB
Other Borrowings from DCCB / SCB (to be specified)
Borrowings from State Government
Borrowings from Other Institutions (other than DCCB/SCB/State Govt.)
CONTRA ITEMS
1.
Bills for Collection (Being Bills Receivable as per Contra)
BRANCH ADJUSTMENT ACCOUNT (Applicable to PACS that have more than

one branch)
OTHER LIABILITIES
1.
2.
3.
4.
5.
Interest Accrued on Deposits

Interest Accrued on Borrowings
Unclaimed Dividend
Sundry Creditors
Other Liabilities.
PROVISIONS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Provision for PF / Gratuity / Bonus / Pension

Provision for Standard Assets
Provision for NPAs Sub-Standard Assets
Provision for NPAs Doubtful Assets
Provision for NPAs Loss Assets
Overdue Interest Reserve
Provision for overdue interest on investments
Provision for outstanding Expenses
Provision for Sundry Debtors for Credit Sales
Provision for Sundry Debtors (Others)
Provision for Depreciation in the value of Investments
Other Provisions
ASSETS
CASH AND BANK BALANCES
1.
2.
3.
4.
Current Account with DCCB/SCB

Current Account with other banks
Saving Bank Account with DCCB/SCB
Saving Bank Account with Other Banks/Institutions
INVESTMENTS
1.
2.
3.
4.
5.
6.
7.
8.
Government and Trustee Securities

Shares in Other Cooperative Institutions
Term Deposits with SCB / DCCB representing Reserve Fund
Term Deposits with DCCB / SCB* (other than Reserve Fund)
Term Deposits with other banks
NSC / KVP
Staff PF balance with PF Trust / as deposit with Banks
Other Investments
LOANS AND ADVANCES

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
ST (SAO) Loans / KCC Loans

Medium Term / Long Term Agricultural Loans
MT Conversion Loans
MT /LT Reschedulement
Loans against pledge of agriculture produce
SHG Loans
Non-Farm Sector Loans
Loans against Deposit
Loans for Consumer Durables
Gold Loans
Loans to Staff Members
Other Loans
CLOSING STOCKS
1.
2.
3.
4.
5.
6.
7.
8.
Agricultural Inputs Fertilisers

Agricultural Inputs Seeds
Agriculural Inputs - Pesticides
Public Distribution System Commodities
Non-PDS Consumer Items
Food grains and other Commodities under Procurement Scheme
Materials under Mid-day Meals Scheme
Other stocks / goods / Work in Progress
FIXED ASSETS
1.
2.
3.
4.
5.
Land and Buildings including Go downs

Furniture and Fixtures
Computers and Electrical Installations
Vehicles
Other Fixed Assets
OTHER ASSETS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Interest Accrued but not due on Standard Loans

Interest accrued but not due on NPA Loans
Overdue interest receivable
Interest receivable on Investments.
Tax Deducted at Source.
Sundry Debtors for credit sales.
Sundry Debtors for others
Deposits with Agencies/Parties
Prepaid Expenses
Misc. Income receivable.
PROFIT AND LOSS ACCOUNT

A. EXPENDITURE :
1.
2.
3.
4.
Interest
Interest
Interest
Interest
on
on
on
on
Deposits
Borrowings from DCCB / SCB2
Loans availed from State Government
Borrowings from others
ESTABLISHMENT AND OTHER EXPENSES

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
2
Salary and Allowances (including Contribution to PF, Bonus, Gratuity

and Pension Fund)
Management expenses (expenditure relating to board meetings etc)
Rent, Taxes, Electricity
Repair Costs of Premises
Insurance
Law charges
Postage and telephone charges
Printing and Stationery
Audit Fees
Vehicle expenses
Travelling & Conveyance expenses
Donations and Subscriptions
Depreciation on properties
Applicable to PACS under two-tier system
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
Depreciation in value of investments

Other expenses
Provisions for Standard assets
Provisions for Sub standard assets
Provisions for Doubtful Assets (loans)
Provisions for Loss Assets ( loans)
Provisions for Bad and Doubtful Debts (Others)
Provisions for Bad and doubtful debts (credit sales)
Provisions for Overdue Interest on loans
Provisions for Overdue interest on investments
Provisions for depreciation in value of investments
Other Provisions
PROFIT AND LOSS ACCOUNT

B. INCOME
1.
2.
3.
4.
5.
6.
Interest on Loans and Advances

Dividend on Investments
Interest on deposits with banks/institutions.
Rental Income
Admission Fees
Other Miscellaneous Income (Locker Rent, Fee-based Income, Custom
hiring etc.)
TRADING ACCOUNT
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Purchase of Fertilizers
Purchase of Seeds
Purchase of Pesticides
Sale of Fertilizers
Sale of Seeds
Sale of Pesticides
Purchase of PDS Commodities
Sale of PDS Commodities
Purchase of Non-PDS Commodities
Sale of Non-PDS Commodities
Purchase of Food grains and other Commodities under Government
Procurement Scheme
Sale of Food grains and other Commodities under Government
Procurement Scheme
Purchase of Food grains and other items under Mid-day Meal Scheme
Sale of Food items under Mid-day Meal Scheme
Transport/ other expenses on Purchase of Fertilizers
Transport/ other expenses on Purchase of Seeds
Transport/ other expenses on Purchase of Pesticides
Transport/ other expenses on Purchase of PDS Commodities
19.
20.
Transport/ other expenses on Purchase of Non-PDS Commodities

Transport/ other expenses on Purchase of Food grains and other
Commodities under Government Procurement Scheme
21. Transport/ other expenses on Purchase of Material under Mid-day Meal
Scheme
22. Salary of Salesman/Manufacturing Wages
23. License Fee
24. Gunny Bag Sales
25. Impairment in Stocks
26. Factory Expenses
27. Commission
28. Compensation
29. Other Trading Income
30. Purchase Returns
31. Sales Returns
Note:
(i) Branch Adjustment A/c (Debit Balance) will appear on the asset side
(ii) Subsidy meant for members (at Sr.No.9 under Reserves and Grants) is in
the nature of Outside liability.
(iii) P & L Account (Debit balance, i.e., loss / accumulated losses) will appear
on assets side of the balance sheet
(iv) Bills for Collection (being bills receivable as per contra) will appear on both
sides of the balance sheet.
(v) Insurance, rent and interest expenses may be seggregated between Trading
A/c and Profit & Loss A/c as per the nature of the transaction.
(vi) If the society mobilises the deposits other than those indicated at Sr. No. 1
to 4 under deposits, same may be shown under other deposits.
3.
BASIC RECORDS TO BE MAINTAINED BY PACS
The following records/registers have been recommended under CAS for

PACS.
S.
No.
Main P&L /
BS Head
Registers/day books/ledgers
Other control registers

not linked to financial
statements
Membership registers
1.
Share Capital
Share capital ledger.
2.
Deposits
Savings Account Ledger
Fixed Deposit Ledger

Recurring Deposit Ledger
Reinvestment Deposit Ledger

Monthly interest payment
register
Accounts Opened and

Closed register
Due Date Register
Maturity register for
term, recurring and
reinvestment deposits
quarterly
Inoperative Accounts
Register
Due date Register
3.
Borrowings
Borrowings ledger
4.
Cash & Bank

balances
Investments
Cash book, Bank book
Investment Ledger
- Maturity Register
Loans &
Advances
Loan Ledger (Short Term

Crop Loans, Kisan Credit
Card, Demand Loans, Loans
against Deposit etc.)
Loan Ledger (Medium Term,
Long Term)
Gold Loan Ledger
Produce Pledge Loan Ledger
Loan Disbursement Register
5.
6.
7.
8.
9.
10.
11.
Fixed Assets
Sundry
debtors &
creditors
Inventory
Purchases &
sales
Locker rent
The Furniture, Fittings,

Office Equipment and Other
Movable Assets register.
Land & building register
Depreciation chart
Sundry debtors & creditors
ledger
- Individual / agency wise

debtor and creditor Ledger
Stock Register
Purchases & sales registers
Safe deposit locker operation register
Gold Stock Register

Pledged Stock Register
Index of Direct and
Indirect Liability
(Optional)
Acknowledgement of
Debt Register
Suit Filed Register
DCB and overdue / NPA
register
Insurance policy register
Formats of control registers which are not indicated in the CAS circular No.
152 A dated 18 May 2007 are furnished below:
Inoperative Deposit Accounts Register: The Register may be maintained in the

following format in respect of accounts not operated for more than three years.
Sr.No.
Name of
depositor
Account
No.
3
Balance
(Rs.)
Date of
last
operation
Remarks
Initials
Borrowings Due Date Register:
Sr.No. Name Amount

Purpose GL
Due date
Date of
Remarks Initials
of
borrowed
Folio for
repayment
agency (Rs.)
No.
repayment
/
Bank
1
Investment Maturity Register:
Sr.No.
Details of
GL
investment Folio
No.
2
Amount Date of
Date of
Remarks Initials
(Rs.)
maturity realisation
4
SUIT FILED REGISTER

S.No.
Name of
borrower
Ledger
folio
No.
Purpose
Date
of
loan
Amt.
of
loan
(Rs.)
Overdue
amount
(Rs.)
Overdue
interest
(Rs.)
Date of
overdue
Particular
s of legal
action
Remarks
10
11
(i) The above register may be maintained broad purpose-wise (i.e., (a) ST (Agri), (b) ST (non-Agri) (c) TL (Agri) (d) TL
(Non Agri)
(ii) Under broad purposes, details may be given separately in respect of (i) arbitration cases (ii) decree obtained (iii)
EPs filed
10
DEMAND COLLECTION AND BALANCE REGISTER

For the period ending 31 March / 30 June ---------------
(Amt. Rs.000)
Principal
S.
No.
1
I
1
2
3
II
1
2
3
4
5
6
III
Type of Loan
Arrears
2
Short Terms
ST (Agrl) (including
KCC)
ST (Non Agrl)
Total (1 + 2)
Medium Term /
Long Term
MT / LT Agriculture
MT / LT
(Conversion /
Rephasement /
Reschedulement)
MT / LT (Non Agrl)
SHGs
Others
Total (1 to 5)
Grand Total (3 + 6)
Demand
Current
(including
advance
repayment)
4
11
Collection
Total
(col. 3
+
col.4)
5
Total
Of which
repaid in
advance
Balance
(col.5
col.6)
8
Percentage of
Collection to
Demand under
Principal (col.
6 / col. 5) %
9
Interest
Demand
Arrears
Current
10
11
Total
(Col. 10
+
Col.11)
12
Total
Collection
Of which
repaid in
advance
Balance
(Col. 12
Col.
13)
13
14
15
OVERDUE / NPA REGISTER

As on 31 March --------------(year)
(i)
Sr.No.
Name of
borrower
and A/c
No.
Ledger
Folio No.
Purpose
Date of loan
disbursement
Amount
ofloan
(Rs.)
Loan
outstanding
(Rs.)
Date of
overdue
Security
available
Remarks
10
The above register is required to be maintained separately for each type of loan
(ii) Under each type of loan, register may be maintained ( period-wise viz., overdue below 1 year, 1 to 3 years, 3 to 4 yrs., 4 to 6 yrs.,
over 6 years and also for Loss Assets)
12
Individual Debtor and Creditor Ledger
Name of the Debtor / Creditor
Date
Folio No.
of Day
Book
Particulars
Debit
(Rs.)
4
Credit
(Rs.)
5
Balance
(Rs.)
6
Initials
Note: Control Registers are required to be maintained as per requirement of the

Society.
13
4.
BASIC ACCOUNTING PRINCIPLES AND POLICIES3
4.1 "An accounting system is a series of tasks in an entity by which

transactions are processed as a means of maintaining financial records. Such a
system should recognize, calculate, classify, post, analyze, summarize and report
transactions." An accounting system should lead to proper recording of
transactions entered into by the business during the period of the accounts and
drawing up the final statements viz., the Balance Sheet and Profit Loss Account,
such that these exhibit truly and fairly the profitability and the financial position
of the business to which they relate.
4.2 The preparation and presentation of financial statements under the
Common Accounting System are based on certain fundamental accounting
assumptions. The following are the generally accepted accounting assumptions
and conventions:
i)
Going Concern - The society is viewed as a business concern that will

continue its operations in the foreseeable future. This implies that the entity
does not intend to, nor will it be necessary to, materially curtail the scale of
its operations or be liquidated in the foreseeable future.
ii)
Consistency - It is assumed that the accounting policies adopted are

consistent from one period to another.
iii)
Accrual - Revenues and costs are recognized as they are earned or incurred
and not as money is received or paid, and are recorded in the accounting
records and reported in the financial statements of the periods to which they
relate.
iv)
Timely recognition in Accounting Records Accounting transactions should be

recorded on a timely basis so that all material information applicable to each
accounting period will be shown in the records. To properly recognize in
accounting records and financial reports the reasonable value of assets
liabilities, equity and revenues and expenses, each society should make
provision for losses that may be sustained in the collection or conversion of
loans and other assets by charges against current operations.
v)
Transparency and disclosure This requires that the members of the society
and other users of the financial statements should be informed of the
material and relevant information about financial affairs of the society either
through the financial statements or in the notes that accompany the
statements or supplementary schedules.
If any of the accounting assumptions do not hold good in the preparation of the
financial statements the same must be specifically disclosed.
4.3 PACS is a business entity undertaking both credit and non-credit business.
Non-credit business of the PACS are divided into five broad groups depending
upon the nature of activities and materials the PACS deal in. These groups are for
trading in:
i)
Agricultural inputs
ii)
PDS commodities
iii)
Non-PDS consumer items
Adopted from Common Accounting System

14
iv)
Foodgrains and other commodities under Govt. Procurement Scheme.
v)
Socially relevant schemes like Mid-day Meal Scheme.
But in reporting all business transactions of the PACS, the intention is to exhibit
a true and fair picture of the profitability and financial position of the business.
This calls for a sound system of keeping of accounts to record all transactions in
proper manner.
4.4 Double entry system Every business transaction involves the transfer of
money (or moneys worth) from one account to another and thus the transfer
necessarily involves two accounts in opposite directions. The double entry
system of book keeping records both the aspects of every transaction and
therefore follows the rule that every debit must have a corresponding credit and
vice versa. This rule helps to check the arithmetical accuracy of records by
preparing the trial balance statement. Accounts maintained under the single
entry system record only one aspect of the transaction and the record is therefore
incomplete. Certain rules must be observed in recording transactions under the
double entry system. The two elements of every transaction must be grouped
under three types of accounts and each type of account has its rules for recording
the debit and the credit aspect of the transaction. The two principal types of
accounts are (i) Personal Accounts and (ii) Impersonal Accounts. Impersonal
Accounts are sub divided into a) Real or Asset Accounts and b) Nominal
Accounts. Personal Account contains a record of transactions with a 'person' that
could be an individual, group, society, bank etc. Real Accounts are accounts of
properties or assets and contain a record of purchases and sales of the properties
or assets, like land, building, goods, cash etc. Nominal accounts are accounts of
expenditure and income and record gains and losses. The accounting rules to be
followed for the three types of accounts are:
Type of Account
Personal
Real
Nominal
Rules of entry
Debit
Credit
Receiver
Giver
What comes in
What goes out
Expenses and
Incomes and gains
losses
All transactions will have a debit and a credit voucher for equal amounts.
4.5
Accounting Principles
Recording of transactions in books should be done having regard to certain

fundamental principles of accounting. The principles are:
i)
Double-entry book-keeping system. All transactions to have a debit and

credit of equal amount.
ii)
Distinctions to be drawn between capital expenditure and revenue

expenditure and capital receipts and revenue receipts.
iii)
Financial statements must be prepared on historical cost basis and should

conform to statutory provisions and practices.
iv)
Investments must be valued at the lower of cost or market value.
v)
Book debts must be valued only at the realizable amounts and in accordance
with regulatory norms/ guidelines.
15
vi)
Expenditure and income to be treated on accrual basis. Guidelines issued in

this regard by RBI / NABARD may be followed.
vii)
Provisions for doubtful advances must be made to the satisfaction of the

auditors and in accordance with guidelines issued by the regulatory
authority.
viii)
Unsold stock at the end of the year should be brought into accounts and
valued on a recognized basis that is consistently being followed in the
organization.
ix)
Premises and other fixed assets must be accounted for at historical cost.
x)
Depreciation should be provided for on depreciable assets on straight line or

diminishing balance method on a consistent basis.
xi)
Provisions for gratuity and provident fund benefits to staff are to be made on
accrual basis. Separate funds for gratuity and provident fund are to be
created and should not be mixed with the funds of the PACS.
xii)
A clear demarcation be made in regard to provisions and contingencies on

the one side and reserves on the other. While provisions and contingencies
are to be made from P&L Account, statutory and other reserves be made out
of appropriation of profits.
xiii)
The net profit disclosed in the Profit and Loss account must be computed
after provision for standard loans, bad and doubtful debts / NPAs, provision
for overdue interest, depreciation/erosion in the value of securities and other
assets, transfers to contingency funds and other usual or necessary
provisions.
4.6 Consistent with the concepts and principles outlined in the foregoing
paragraphs all items of income and expenditure must be compiled under relevant
heads so as to disclose the sources of income, nature of expenditure incurred to
earn it, the composition of assets, sources from which capital has been procured
and the nature of liabilities outstanding for payment. The accounting system in
all PACS need to follow these principles and policies in the treatment and
recording of all financial transactions.
16
5.
STEPS FOR PREPARARTION OF FINANCIAL STATEMENTS
Financial statements of PACS would include the following statements:

i)
Trial balance (Annexure I)
ii)
Trading Account (Annexure II0
iii)
Profit and Loss Account (Annexure III)
iv)
Balance sheet(Annexure IV)
v)
Annexure to Profit and Loss Account and Balance Sheet
The above statements are generated from books of accounts maintained by the
society.
5.1
Logical accounting steps
S.
Activity
No.
1.
Voucher preparation
2.
3.
4.
5.
5.2
Description
As defined in Chapter 9 of this manual, voucher

is a primary document, a piece of substantiating
evidence; a proof; or, a written record of
expenditure,
disbursement,
or
completed
transaction; The first step in Book Keeping starts
with voucher preparation.
Voucher authorization
Once the voucher is prepared, it has to be
approved/authorized by designated authority for
its completeness.
Disbursement/collections Once the voucher is complete in all aspects the
actual transaction i.e. expenditure disbursement
etc takes place
Voucher Entry
On the basis of the voucher, the books of original
entry, i.e. subsidiary books, registers, personal
ledgers are updated.
General ledger posting
Posting is the transfer of accounting entries from
a journal of original entry into a ledger book, in
chronological order according to when they were
generated. From the subsidiary books and
personal ledgers, entries are posted to respective
general ledger accounts that contains all of the
financial accounts of a business; contains
offsetting debit and credit accounts (including
control accounts).
Closing of books of accounts for generation of financial statements
The following steps should be initiated to close the books of accounts and prepare
financial statements
i)
Close the cash/day book and verify and tally the cash balance physically.
ii)
Reconcile balances with DCCB/SCB and other Banks in deposit accounts as

per bankbook/General Ledger with the balance confirmed by them (through
Balance Confirmation Certificates) by preparing Bank Reconciliation
statements.
17
iii)
Pass accounting entries for Interest accrued on Loans and advances (both
overdue as well as non-overdue amount) as also Income accrued on
investments up to the close of the year (31st March)
iv)
Pass accounting entries for Interest accrued but not due (interest payable)
on deposits and borrowings.
v)
Make provisions for all administrative expenses, audit fees, etc. which is due
but not paid up to 31st March.
vi)
Ensure that all the investment receipts and share certificates are in
agreement with the investments shown in the books of account.
vii)
In case there is depreciation in the value of investment, necessary provision

for the same should be made.
viii)
In case PACS is engaged in non-credit activity (PDS, Non-PDS etc.) closing

stock should be physically verified by the Auditor of PACS. On verification,
actual stock should be compared with the stock as per stock register. The
deficit, if any, should be brought to the notice of management for taking
corrective action. Closing stock should be valued on the basis of cost or
market price whichever is less. Damaged or degraded stock should be valued
at realizable price.
ix)
In the books, entries for accounting closing stock of all the items should be
passed with reference to actual stock and not stock as per stock register
after physically verifying the stock.
x)
Make provision for Non-Performing Assets by assessing performance of each

loan account. Accounts which have become NPAs as per prudential norms,
should be considered for making provision.
xi)
Make provision for overdue interest on Loans and Investments for the year.
xii)
Verify the entire fixed asset physically and ensure that there is no shortage
of assets vis--vis assets as per dead stock register. Further, also ensure
that no damage to the asset is caused to the extent that the asset became
unusable. In such a case, the asset should be written off.
xiii)
Prepare depreciation chart indicating all fixed asset and make entries for
depreciation on fixed assets. The depreciation in value of fixed assets for the
year should match with the amount debited to P & L Account. The written
down value (WDV)/straight line method at the year end should match and
reflect in the Balance sheet.
xiv) In case assets are purchased out of grant assistance received from State
Govt./NABARD, depreciation on those assets should be shown as utilization

by debiting the respective grant account and crediting Depreciation Account.
xv)
Ensure that Share Register is totaled and balanced. Total of member-wise

share capital should tally with the share capital as per the General Ledger
balance.
xvi) In respect of Borrowings, Balance Confirmation Certificate should be
obtained from the respective institutions / lenders and balances under

borrowing accounts as per General Ledger should be reconciled / tallied with
the balance confirmed.
18
xvii) All deposit accounts should be balanced and summary of depositor wise
balance outstanding under each type of deposits should be prepared. The

total of outstanding balances of all depositors under respective type of
deposits should be tallied with the balance in each deposit account as per
General Ledger.
xviii) If there are more than one branch, inter-branch entries should be reconciled
by each branch and the net of such balance should be taken to the balance
sheet.
Note: All loan accounts,sundry creditors/debtors accounts should be balanced and
summary of account wise balance outstanding under each type of accounts should
be prepared.
5.3
Preparation of trial balance
After passing all the accounting entries, each of the expenses and income
accounts head in General Ledger, should be closed and balances under Assets &
Liabilities account carried forward to the new year. Trial balance incorporating all
the account heads as per the list prescribed in the Chapter 2 of this manual
should be prepared.
5.4 Preparation of Trading Account, Profit and Loss Account & Balance
Sheet
i)
Once trial balance is tallied, all items related to trading A/c (purchases,
sales, Sales Return, Expenses related to trading and stock) in respect of all
non-credit trading activities should be posted to Trading Account. All non
trading expenses, depreciations and provisions for bad and doubtful debts,
depreciation in the value of assets and overdue interest etc. should be posted
to Profit and Loss Account on expenditure side. All the income (interest on
loans and advances, income from investments and other revenue receipts)
should be posted to Income side of Profit and Loss account. All the assets
and liabilities should be carried / posted to Balance Sheet. All the financial
statements should be prepared in the formats suggested under Common
Accounting System (CAS) ( Annexures I to IV of this document).
ii)
Trading account should be closed and Gross Profit or Gross Loss should be
ascertained. For this purpose, a summary of trading accounts may be
prepared as per the suggested formats. If there is a gross profit, the same
should be brought forward to the Credit side of Profit and Loss Account. If
there is a gross loss, the same should be taken to the Debit side of Profit
and Loss Account.
iii)
Thereafter Profit and Loss Account should be closed and net profit or loss for
the year should be ascertained. If there is a net profit, the same should be
carried forward to P & L appropriation account. In case of loss, the same
should be carried to balance sheet.
iv)
In case there is a profit for the year, the amount of profit together with
balance of unappropriated profit of earlier years, should be appropriated to
various Reserves / Funds taking into account statutory requirement and as
19
per the decision taken in the Annual General Meeting for appropriation and
payment of proposed dividend on share capital.
v)
The unappropriated balance of Profit should be carried to Liability side of

the Balance sheet.
vi)
Balance Sheet should be prepared as per the format suggested. Total of

Assets and Liabilities should be tallied. No new heads of accounts both
under Assets and Liabilities should be added. If there are more than one
item under any of the Others (to be specified) sub-head (say, under the
head of Reserves and Funds or Investments etc.), the same should be
indicated with such details in an Annexure.
vii)
No additional General Ledger Heads of Accounts to be opened other than the

ones prescribed in Chapter 2 of this manual (Annexure VII of the Common
Accounting System). However, subsidiary general ledger heads could be
prepared for more details upto two more stages for eliciting more information
under computerised environments. As for example, GL A/c. Head Savings
Deposits can be split into next stage under the subsidiary General Ledger
as Savings Deposit from Members Male, Members Female. Further, savings
deposits from Male Members could be segregated village-wise. But, under all
circumstances, only one broad account head i.e. Savings Deposits should
appear in the Financial Statements of the PACS.
Certain items under the Balance Sheet should be provided with necessary details
in the form of Annexures. Sundry Creditors, Sundry Debtors (other than Credit
Sales), Any Other Stocks/Goods under Closing Stock, Shares in other
Cooperative Institutions are to be indicated in detail in the Annexures with the
relevant date, particulars and amounts of the respective entries.
5.5
i)
ii)
iii)
Explanatory Note to the Financial Statements of PACS

Capital Reserve Capital Reserve may arise on account of the following:
Profit on sale of capital asset
Amount received against the forfeiture of shares
Govt. grant received in the form of promoters contribution
Excess of assets taken over than the amount of liability, on acquisition of
business.
Building Fund This fund account will be credited with
Subsidy received from State Government/Central Govt./Other Agencies for
construction of building.
Appropriation from profit of society to the Fund
Donations, if any,
Recapitalization Fund
Fund received from Government of India and the State Government towards
accumulated losses and for maintaining CRAR of 7% under the Revival Package
should be included here.
iv)
Investments
Investments net of provision should be shown in the outer column. Other items
may be shown in the inner column (break-up column).
20
v)
Expenditure and Income
Expenses shown in Profit and Loss account include paid and payable figures.
Similarly, income shown consist of both income received and income receivable.
vi)
Management expenses include meeting expenses of Board

Insurance and rent of Godown
The expenses on godown rent should be debited to Trading Account of different

activities in proportion to space occupied for storing the specified stock.
vii)
Insurance of stock should be charged to Trading Account for respective

activity.
Salary of salesman/manufacturing wages, electricity and rent should be
charged to the Trading Account of different activities, if the services are
exclusively used for those activities.
Loans and advances
Only net figure after deducting provision for NPAs should be shown in the outer
column.
viii)
Closing Stock
Shortage or deficit in stock should not be shown under this head. If any amount
is recovered from the salesman for deficit in stock, the same should be credited to
Trading Account.
ix)
5.6
The figure of interest accrued and receivable should be shown net of

Provisions made in the outer column.
Preparation of Annual Report
i)
It is necessary that the PACS also prepare Annual Report incorporating

therein important developments in the society covering total members,
enrollment of new members, borrowing members, members retired during
the year, changes in the Management Committee and holding of MC
meetings as per bye-law, growth of deposits, advances and profit, issue of
Kisan Credit Cards and ST-SAO loans disbursed through KCC, loans issued
to SC/ST/ women beneficiaries/ SHGs and information about Farmers
clubs and other details as per the provisions of the Cooperative Societies
Act along with the financial statements of PACS.
ii)
The copies of financial statements of PACS may be supplied to the members.
iii)
A copy of the Annual Report may also be displayed on the society premises
for information of the members and others.
21
6.
ACCOUNTING ENTRIES FOR CREDIT ACTIVITIES
6.1
DEPOSITS ACCEPTANCE FROM MEMBERS/PUBLIC
6.1.1 Entry upon receipt of savings/recurring/fixed/re-investment deposits.

EX: If Rs. 100 is deposited in savings/recurring/fixed/re-investment
deposits by account holders.
Voucher Type: PIS
Particulars
Debit
Credit
Rs.
Rs.
100
By Cash
To Relevant
Savings/Fixed/Recurring/reinvestment A/c
100
Books/registers
affected
Savings/RD/Fixed/
deposit ledger
Relevant general
ledger accounts
Cash book
(Being cash deposited to the

above SB account.)
The book-keeping process involved from acceptance to repayment of fixed
deposits is further illustrated in Appendix 10 Illustration No. 1 of this
manual.
6.1.2 Entry upon withdrawal of cash from savings A/c by using Cash withdrawal
form by accountholders.
EX: If Rs. 100 is withdrawn.
Voucher Type: CWF
Particulars
Debit
Rs.
100
By Relevant Savings A/c

To Cash A/c
(Being cash withdrawn from the
above SB account.)
22
Credit
Rs.
Books/registers
affected
Cash book
Savings ledger
100 Relevant general
ledger accounts
6.1.3 Entry upon credit of interest on FD

EX: Monthly interest of Rs. 15 on FD is to be provided after deduction of
Rs. 2 as TDS.
Voucher Type: JV
Particulars
Debit
Rs.
15
By Interest on depositsFD
To Interest Accrued on deposit
A/c
TDS payable A/c
Credit
Rs.
Books/registers
affected
Deposit ledger
Interest payment
13
register
2 Relevant general
ledger accounts
(Being interest for the period

from to paid on deposit
A/c no. at the rate of %
p.a. and TDS at ... %)
6.1.4 Entry upon subsequent payment of interest after the above said provision is
created.
Voucher Type: PV
Particulars
By Interest accrued on deposits
A/c
Debit
Rs.
13
Credit
Rs.
13
To Cash/SB A/c*
Books/registers
affected
Deposit ledger
Savings deposit
ledger
FD Interest
payment register
Cash book

A/c. no. at the rate of %
p.a.)
*Interest on FD can be paid in cash or credited to SB A/c of the deposit holder.
6.1.5 Entry upon credit of interest on SB.
EX: If Rs. 100 is to be credited to SB A/c after deduction of Rs. 2 as TDS.
Voucher Type: JV
Particulars
Debit
Rs.
100
By Interest on depositsSB A/c

To Relevant SB A/c
TDS payable A/c
from to paid on SB A/c.
no. at the rate of % p.a.
and TDS at ... % effected)
23
Credit
Rs.
Books/registers
affected
Savings deposit
ledger
98 Relevant general
2
ledger accounts
6.1.6 Entry upon credit of interest on Recurring/re-investment deposits to the

respective A/cs.
EX: If Rs. 100 is to be credited to RD/RID after deduction of Rs. 2 as TDS*.
Voucher Type: JV
Particulars
Debit
Rs.
100
By Interest on deposits
Recurring/RID
Credit
Rs.
Books/registers
affected
Deposit ledger
Relevant general
98
ledger accounts
2
To Relevant Recurring/RID A/c

TDS payable A/c
A/c no. at the rate of %
p.a. by way of credit to and TDS
at ... % effected)
*TDS if applicable
6.1.7 Entry upon repayment of deposits.
EX: If Rs. 100 in RD/RID/SB/FD A/c is to be paid on closure .

Voucher Type: PV/JV
Particulars
By Relevant RD/RID/SB/FD A/c
Debit
Rs.
100
Credit
Rs.
100
To Cash/SB A/c
(Being the deposit no. of Mr.
repaid )
Books/registers
affected
Cash book
Deposit ledger
Savings ledger
Relevant general
ledger accounts
6.2. BORROWINGS
6.2.1 Entry upon receipt of borrowings.
EX: If Rs. 100 is borrowed from DCCB/Others
Voucher Type: RV
Particulars
Debit
Rs.
100
By Cash/current A/c
To Relevant Borrowings A/c
(Being loan received carrying
an interest rate of repayable in
)
24
Credit
Rs.
Books/registers
affected
Borrowing ledger
cash book/bank
100
book
Relevant general
ledger accounts
6.2.2 Entry upon provision and subsequent payment of Interest on borrowings.

EX: If Rs. 100 is to be provided as interest on borrowings.
Voucher Type: JV
Particulars
Debit
Rs.
100
By Interest on Borrowings
DCCBs/others
To Interest Accrued on
borrowings A/c
Credit
Rs.
Books/registers
affected
Borrowing ledger
Relevant general
100
ledger accounts
(Being interest on borrowings

from to credited to loan
A/c no. as per working sheet
attached)
6.2.3 *Upon payment of above interest amount.
Voucher Type: PV
Particulars
Debit
Rs.
100
By Interest Accrued on
borrowings A/c
To Cash/Current A/c
Credit
Rs.
Books/registers
affected
Cash book/bank
book
100 Borrowings ledger
Relevant ledger
accounts
(Being interest on loan no.

taken on now paid)
6.2.4 Entry upon repayment of borrowings.

EX: If Rs. 100 is repaid, then
Voucher Type: PV
Particulars
Debit
Rs.
100
By Relevant Borrowings A/c

To Cash/Bank A/c
(Being repayment of instalment
on borrowing -- now repaid)
25
Credit
Rs.
Books/registers
affected
Borrowings ledger
Bank book
ledger accounts
6.2.5 Entry upon reschedulement of MT/LT borrowings.

EX: If Rs. 100 in MT/LT borrowings account is rescheduled.
Voucher Type: JV
Particulars
Debit
Rs.
100
By Relevant Borrowings A/c

To Relevant Rescheduled MT/LT
Borrowings A/c
Credit
Rs.
100
Books/registers
affected
Relevant general
ledger accounts
(Being the borrowings from to

credited to loan A/c no. as
per working sheet attached)
6.3
LOANS AND ADVANCES
6.3.1 Entry for loan disbursement.

EX: If Rs. 100 is disbursed as loan
Voucher Type: PV
Particulars
Debit
Rs.
100
By Relevant Loan A/c

To Cash A/c
(Being loan disbursed against
sanction of Rs. vide sanction
ref. no. dated )
Credit
Rs.
Books/registers
affected
Cash book
Respective
loan
100
ledgers
Relevant general
ledger accounts
The book-keeping process involved from disbursement to repayment of MT

loans is further illustrated in Appendix 10 Illustration No. 2 of this
manual.
6.3.2 Entry for provision of interest on loans & advances which is not overdue.
EX: If Rs. 200 is the interest due on all loans and advances.
Voucher Type: JV
Particulars
By Non overdue interest
receivable on loans & advances
A/c
To Interest on loans & advances
A/c
(Being interest on loans &
advances for the period from
to as per the interest
calculation worksheet)
26
Debit
Rs.
200
Credit
Rs.
Books/registers
affected
Relevant loan
registers and
general ledger
200
accounts
6.3.3 Entry on receipt of Rs. 10 interest due on loans & advances

EX: Of the
received.
Rs. 200 interest due on all loans and advances, Rs. 10 is

Voucher Type: RV
Particulars
Debit
Rs.
10
By Cash A/c
To Non overdue interest
A/c
Credit
Rs.
Books/registers
affected
Relevant loan
registers
10 Cash book
Relevant general
ledger accounts
(Being interest on loans &

advances due received from )
6.3.4 Entry for accounting interest overdue on overdue loans & advances.
EX: If Rs. 20 of the interest due on loans & advances becomes overdue.
Voucher Type: JV
Particulars
Debit
Rs.
20
By Overdue Interest Receivable

A/c
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
20
To Non overdue interest

A/c
(Being overdue interest on
overdue loans & advances for
the period from to now
transferred)
6.3.5 Entry for making provision for overdue interest on loans & advances.
EX: In respect of the overdue interest on NPA loans. (say, Rs. 5)
Voucher Type: JV
Particulars
Debit
Rs.
By Profit & loss A/c

To Provision for overdue interest
on loans A/c
(Being provision made for
overdue interest on NPA loans)
27
Credit
Rs.
Books/registers
affected
DCB & NPA
provisioning
5
register
Relevant general
ledger accounts
6.3.6 Entry for receipt of overdue interest.

EX: If Rs. 5 of overdue interest is received.
Voucher Type: RV
Particulars
Debit
Rs.
By Cash A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
5
ledger accounts
To Overdue Interest A/c

(Being overdue interest on the
following now received.
Name
Loan Type
A/c no.
Amount lying in Overdue
interest A/c)
6.3.7 Entry for accounting for interest accrued but not due on standard loans &
advances.
EX: If Rs. 25 is accrued interest but not due then
Voucher Type: JV
Particulars
Debit
Rs.
25
By Interest Accrued but not due on

standard loans & advances
To Interest on loans & advances A/c
(Being Interest Accrued but not due
on the following
Name
Loan Type
A/c no.
Amount Rs. )
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
25
6.3.8 Entry upon receipt of installments in loans.

EX: If Rs. 5 loan amount is received.
Voucher Type: RV
Particulars
Debit
Rs.
By Cash A/c
To Relevant Loan A/c
(Being installment of Rs.
received)
28
Credit
Rs.
Books/registers
affected
Cash book
Relevant loan
5
registers and
ledger general
accounts
6.3.9 Entry for reschedulement of loans.

Rescheduled loan A/c is debited to record loan accounts rescheduled and
credited to record collection in such accounts. All other aspects such as
recording of interest income, repayments, etc. should be dealt in the
manner explained above.
EX: If an outstanding loan of Rs. 10 is rescheduled.
Voucher Type: JV
Particulars
Debit
Rs.
10
By Relevant Rescheduled loan

A/c
Credit
Rs.
10
Books/registers
Effected
Relevant general
ledger accounts
(Being the entry passed for

recording reschedulement of
loans & advances as per sheet)
6.3.10
Entry for provisioning on standard assets.
EX: If Rs. 10 is provided on standard loans & advances.

Voucher Type: JV
Particulars
Debit
Rs.
10
By Profit & Loss A/c

To Provision on standard assets
(Being provision on standard
assets made at the rate of as
per asset provisioning norms)
6.3.11
Credit
Rs.
Books/registers
affected
DCB & NPA
provisioning
register
10
Relevant ledger
general accounts
Entry for provisioning on Sub-standard, doubtful and loss assets.
EX: If Rs. 20 is provided on sub-standard, doubtful and loss assets.

Voucher Type: JV
Particulars
Debit
Rs.
20

To Provision on sub-standard
assets/ doubtful debts/loss
assets
(Being provision made at the rate
of % on [as applicable])
29
Credit
Rs.
Books/registers
affected
DCB & NPA
provisioning
20
register
Relevant ledger
general accounts
6.3.12
Entry for writing off loans.
EX: If Rs. 20 outstanding in X loan A/c is to be written off then (to record
the actual write off).
Voucher Type: JV
Particulars
By Provisions for loss Assets A/c
Debit
Rs.
20
Credit
Rs.
To Respective loan A/c
Books/registers
affected
Relevant ledger
general accounts
20
(being the above amount due

written off as per approval dt.
)
6.3.13
Entry for recovery in written off accounts.
EX: If Rs. 10 is subsequently recovered from written off accounts.

Voucher Type: RV
Particulars
Debit
Rs.
10
By Cash A/c
To Recovery in written off A/c
(being the above amount written
off as per approval dt. now
recovered to the above extent)
30
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
10
ledger accounts
7.
ACCOUNTING ENTRIES FOR NON-CREDIT ACTIVITIES
7.1
PURCHASES
7.1.1 Entry upon cash purchases of fertilizers, seeds, etc.

EX: If goods worth Rs. 10 after VAT of Rs. 2 are purchased for cash.
Voucher Type: PV
Particulars
Debit
Rs.
By Purchases of relevant item

A/c
*Input VAT A/c
8
2
To Cash A/c
Credit
Rs.
Books/registers
affected
Purchases
register
Cash book
Relevant general
10
ledger accounts
(Being purchases of (quantity)

vide bill no. dt. )
*If applicable under relevant statute only.
7.1.2 Entry upon purchases of fertilizers, seeds, etc.
EX: If goods worth Rs. 10 after VAT of Rs. 2 are purchased on credit.
Voucher Type: PUV
Particulars
Debit
Rs.
By Purchases of relevant item

A/c
*Input VAT A/c
8
2
To Sundry creditor A/c
Credit
Rs.
Books/registers
affected
Purchases
register
Sundry creditors
ledger
10 Relevant general
ledger accounts

vide bill no. dt. )
*If applicable under relevant statute only.
7.1.3 Entry upon purchases returns.
EX: If goods worth Rs. 10 after VAT of Rs. 2 purchased previously on credit
are returned.
Voucher Type: DN
Particulars
Debit
Rs.
10
By Sundry creditors A/c

To Purchases returns A/c
*Input VAT A/c

vide bill no. dt. now
returned due to )
*If allowed under relevant statute only.
31
Credit
Rs.
Books/registers
affected
Sundry creditors
ledger
8 Relevant general
2
ledger accounts
7.1.4 Entry upon payment to sundry creditors.

EX: If sundry creditors are paid Rs. 10.
Voucher Type: PV
Particulars
Debit
Rs.
10
By Relevant Sundry creditors

A/c
Credit
Rs.
Books/registers
affected
Cash book
Sundry creditors
10
ledger
Relevant ledger
accounts
To Cash A/c
(Being payment made to above
party on account of )
7.1.5 Entry upon payment of Transportation/other exp. on purchases of fertilizers,

seeds, etc.
EX: If Rs. 2 are paid as transportation charges.
Voucher Type: PV
Particulars
By Transportation/other exp. of
relevant item A/c
Debit
Rs.
To Cash A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
ledger accounts
(Being the above exp. paid on

purchases of (quantity) vide
bill no. dt. )
7.1.6 Entry upon receipt of Transportation/other exp. bill on purchases of
fertilizers, seeds, etc. when it is to be paid at a later date.
EX: If the above transportation bill of Rs. 2 has to be paid later.
Voucher Type: JV
Particulars
By Transportation/other exp. of
relevant item A/c
To Relevant Sundry creditors
A/c
(Being the above exp. booked on
purchases of (quantity) vide
bill no. dt. )
32
Debit
Rs.
Credit
Rs.
Books/registers
affected
Sundry creditors
ledger
Relevant general
2
ledger accounts
7.2
SALES
7.2.1 Entry upon cash sales of fertilizers, seeds, pesticides etc.

EX: If goods worth Rs. 10 after VAT/sales tax of Rs. 2 are sold for cash.
Voucher Type: RV
Particulars
Debit
Rs.
10
By Cash A/c
To Sale of relevant item A/c
VAT/sales tax payable A/c
Credit
Rs.
Books/registers
affected
Cash book.
Sales registers
8 Relevant general
2
ledger accounts
(Being sale of (quantity) vide

bill no. dt. to )
7.2.2 Entry upon credit sale of fertilizers, seeds, pesticides etc.
EX: If goods worth Rs. 10 after VAT/sales tax of Rs. 2 are sold on credit.
Voucher Type: SV
Particulars
By Relevant Sundry Debtor A/c
Debit
Rs.
10
To Sale of relevant item A/c

VAT/sales tax payable A/c
Credit
Rs.
Books/registers
affected
Sundry debtors
ledger
8 Sales register
2 Relevant ledger
accounts

bill no. dt. )
7.2.3 Entry upon sales returns.
EX: If goods sold previously for Rs. 10 after VAT/sales tax of Rs. 2 are
returned.
Voucher Type: CN
Particulars
Debit
Rs.
By Sales returns A/c

*VAT/sales tax payable A/c
To Relevant Sundry Debtors A/c

bill no. dt. now returned
back due to )
*If allowed under relevant statutes only.
33
8
2
Credit
Rs.
Books/registers
affected
Sundry debtors
ledger
Relevant general
ledger accounts
10
7.2.4 Entry upon receipt of cash from debtors.

EX: If Rs. 5 is received from sundry debtor.
Voucher Type: RV
Particulars
Debit
Rs.
By Cash A/c
To Relevant Sundry Debtors A/c
Credit
Rs.
Books/registers
affected
Sundry debtors
ledger
5 Relevant general
ledger accounts
(Being receipt of money from the

above debtor towards bill no.
/ advance received for supply of
)
7.3
OTHER INCOME
7.3.1 Entry for booking other income.

EX: If Rs. 10 is receivable.
Voucher Type: JV
Particulars
Debit
Rs.
By Relevant other misc. income

receivable A/c
Credit
Rs.
10
To Other misc. income A/c
Books/registers
affected
Relevant general
ledger accounts
10
(Being [details of I = other

income to be given])
7.3.2 Entry upon receipt of other income.
EX: If the other income of Rs. 10 is received.
Voucher Type: RV
Particulars
Debit
Rs.
10
By Cash A/c
To Relevant Other income
receivable A/c
(Being receipt of income earlier
booked vide Jv. no. dt. )
34
Credit
Rs.
Books/registers
affected
Cash book.
Relevant general
10
ledger accounts
7.3.3 *Entry upon cash sale of gunny bags.

EX: If gunny bags are sold for Rs. 5.
Voucher Type: RV
Particulars
Debit
Rs.
By Cash A/c
To Sale of gunny bags A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
5
ledger accounts
(Being receipt of money against

Sale of (quantity) of gunny
bags to )
*wherever applicable VAT/Sales tax liability has to be created.
35
8.
ACCOUNTING ENTRIES FOR COMMON ACTIVITIES
8.1
SHARE CAPITAL
8.1.1 Memo entry for the authorized capital.

Authorised capital of (no. of shares) divided into (no. of shares) of Rs.
each.
8.1.2 Entry on allotment of shares/admission fee received.
EX: On allotment of shares for Rs. 100 and receipt of admission fee of Rs.
1, then
Voucher Type: RV
Particulars
Debit
Rs.
101
By Cash A/c
To Paid up Capital A/c
Admission Fee A/c
Credit
Rs.
100
1
(Being allotment of shares and

admission fee of the following
members
Name
Admission fee
No. of shares )
Books/registers
affected
Cash book
Share Capital
ledger
Membership
register
Relevant general
ledger accounts
8.1.3 Entry for refund of share capital .

EX: On refund of share capital of Rs. 100.
Voucher Type: PV
Particulars
Debit
Rs.
100
By Paid up Capital A/c

To Cash On Hand A/c
Credit
Rs.
100
(Being share capital of the

following members refunded
Name
No. of shares )
36
Books/registers
affected
Cash book
Share Capital
ledger
Membership
register
Relevant general
ledger accounts
8.1.3 (a)
Entry for retirement of Govt. share capital of Rs.100
Voucher Type: PV
Particulars
Debit
Rs.
100
By Paid up Capital Govt. A/c

To Cash On Hand A/c
Credit
Rs.
Books/registers
affected
Cash book
Paid up Capital 100
Govt. ledger
(Being share capital refunded to

State Govt. on ------------ No. of
shares -------)
8.1.4 Entry upon forfeiture of shares.

EX: On forfeiture of shares worth Rs. 100.
Voucher Type: JV
Particulars
Debit
Rs.
100
By Paid up Capital A/c

To Capital Reserve A/c
(Being share capital of the
following members forfeited and
transferred to capital reserve
Name
No. of shares
Forfeited Amt. per share )
Credit
Rs.
Books/registers
affected
Share Capital
ledger
100 Membership
register
Relevant general
ledger accounts
8.1.5 Entry upon declaration of dividend on share capital.

EX: On declaration of dividend at 5% on share capital of Rs. 100.
Voucher Type: JV
Particulars
Debit
Rs.

To Dividend payable A/c*
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
(Being dividend proposed on

share capital at )
*Dividend Payable may be shown in the account head Others under Other
Liabilities in the Chart of Accounts.
37
8.1.5 (a) Entry upon payment of dividend in the above case

Voucher Type: PV
Particulars
Debit
Rs.
By Dividend Payable A/c
Credit
Rs.
Books/registers
affected
Cash Book
Dividend Payable
5
A/c
To Cash A/c
(Being amount of dividend paid
on share capital at ----)
8.1.6 Entry upon transferring unpaid dividend declared to unclaimed dividend

payable A/c after stipulated period.
EX: If dividend of Rs. 1 remains unpaid beyond stipulated period then
Voucher Type: JV
Particulars
Debit
Rs.
By Dividend payable A/c
Credit
Rs.
To Unclaimed dividend payable

A/c
Books/registers
affected
Relevant general
ledger accounts
(Being dividend proposed on

share capital at being unpaid
now transferred to unclaimed
dividend payable A/c)
8.2
RESERVES & SURPLUS
8.2.1 Entries for Reserves created out of Profit & loss A/c.
EX: If Rs. 100 is required to be transferred to any reserve/fund, then
Voucher Type: JV
Particulars
Debit
Rs.
100

To Relevant Reserve/fund A/c
Credit
Rs.
100
(Being reserve/fund created for

[purpose to be mentioned])
38
Books/registers
affected
Relevant general
ledger accounts
8.2.2 Building Fund creation out of grants received.

EX: If Rs. 100 is received towards construction of building.
Voucher Type: RV
Particulars
Debit
Rs.
100
By Cash A/c
To Building fund A/c
Credit
Rs.
Books/registers
affected
Cash book/Bank
Book
ledger accounts
(Being grants or donations [as

the case may be] received from
towards construction of
building)
8.2.3 Capital reserve creation.
EX: Sale of land with original cost: Rs. 100 for Rs. 200
Voucher Type: RV
Particulars
Debit
Rs.
200
By Cash A/c
To Land A/c
Capital reserve A/c
Credit
Rs.
Books/registers
affected
Cash book
Land register
100
ledger accounts
(Being profit on sale of capital

asset of Rs. 100 transferred to
capital reserve a/c)
8.3
ESTABLISHMENT & ADMINISTRATIVE EXPENSES
8.3.1 Entry for payment of establishment & other office expenses.

EX: If Rs. 10 of establishment exp. are paid.
Voucher Type: PV
Particulars
Debit
Rs.
10
By Relevant Exp. head A/c

To Cash A/c
(Being the above expenses
incurred for the month of
paid against bill no. dt. )
39
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
10
ledger accounts
8.3.2 Entry for providing establishment, office & other expenses.

EX: If Rs. 10 of establishment exp. are to be provided.
Voucher Type: JV
Particulars
Debit
Rs.
10
By Relevant Exp. head A/c
Credit
Rs.
To Provision for outstanding exp.

A/c
10
Books/registers
affected
Relevant general
ledger accounts
(Being provision made for the

month of )
8.3.3 Entry for providing PF/Gratuity/Pension/Bonus.
EX: If Rs. 10 of above exp. are to be provided.
Voucher Type: JV
Particulars
By Salary and Allowances A/c*
Debit
Rs.
10
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
10
To Provision for
PF/Gratuity/Pension/ Bonus
A/c
(Being provision made for the
period of )
*As per chart of accounts salary and allowances includes contribution to
PF, Bonus, Gratuity or Pension Fund.
8.3.4 Entry for payment of outstanding expenses/provisions.
EX: If Rs. 5 of above exp. are paid.
Voucher Type: PV
Particulars
Debit
Rs.
By Provision for Outstanding

expenses A/c
To Cash A/c
(Being payment of above
outstanding/ provisional exp.
for the period )
40
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
5
ledger accounts
8.3.5 Entry for booking pre-paid expenses.

EX: If insurance of Rs. 100 is paid for the period from 1/10/06 to 30/9/07
then the expenses for 2006-07 are
Voucher Type: PV
Particulars
Debit
Rs.
50
50
By Pre-paid exp. A/c

Insurance exp. A/c
To Cash/bank A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
ledger accounts
100
(Being pre-paid portion of the

expenses paid for the period
from to debited to pre-paid
exp. A/c and the balance
pertaining to current year
booked to relevant exp. head
A/c)
8.3.6 Entry for booking pre-paid expenses of previous year in the current year.
EX: In Financial Year 2007-08 the above prepaid exp. of Rs. 50 should be
booked as relevant years expenditure.
Voucher Type: JV
Particulars
Debit
Rs.
50
By Relevant exp. head A/c

To Pre-paid exp. A/c
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
50
(Being pre-paid expenses for the

previous year now transferred
to relevant exp. head A/c )
8.3.7 Entry for reversal of excess provision made.
EX: If provisions/outstanding exp. are excess provided for Rs. 5.
Voucher Type: JV
Particulars
Debit
Rs.
By Outstanding expenses A/c

To Particular exp. head A/c
Credit
Rs.
5
(Being excess provision of above

exp. made for the month of
now reversed by credit to
relevant exp. head A/c)
41
Books/registers
affected
Relevant general
ledger accounts
8.4
FIXED ASSETS
8.4.1 Entry for purchase of fixed assets.

EX: If fixed assets worth Rs. 50 are purchased.
Voucher Type: PUV
Particulars
Debit
Rs.
By Relevant fixed asset A/c
To Relevant Sundry creditors

A/c
(Being purchase of from
vide bill no. dt. )
Credit
Rs.
Books/registers
affected
The Furniture,
Fittings, Office
5
Equipment and
Other Movable
Assets
register/Land
register
Sundry creditors
ledger
Relevant general
ledger accounts
Expenditure incurred for bringing the fixed asset to the current place and
location should be capitalized (added to the cost of fixed asset). For
instance, erection charges, transportation charges etc. should be treated as
part of fixed asset cost.
8.4.2 Entry for fixed assets acquired in settlement of loans.
EX: The society foreclosed the collateral of a borrower for non-payment of
loan of Rs. 20 despite the legal case filed against him. Total claims amount
to Rs. 25 which include overdue interest receivable of Rs. 4 and legal fees of
Rs. 1. Market value of the asset is Rs. 30. Estimated costs to sell Rs. 2.
The fair market value is Rs. 28.
Voucher Type: JV
Particulars
By Assets acquired in settlement
of loans A/c
Debit
Rs.
20
Credit
Rs.
20
(Being collateral foreclosed for

settlement of above loan)
42
Books/registers
affected
Relevant general
ledger accounts
8.4.3 Entry for sale of above fixed assets acquired in settlement of loans.
Voucher Type: RV
Particulars
Debit
Rs.
28
By Cash A/c
To Assets acquired in settlement
of loans A/c
Relevant exp. A/c
Overdue interest receivable A/c
Sundry deposits A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant general
ledger accounts
20
1
4
3
(Being collateral foreclosed

for settlement of above loan now
sold)
8.4.4 Entry for fixed assets acquired from grants/donations received.
Where assets are acquired out of grant funds, the grant amount is
deducted from the gross value of the asset and the asset is shown at the
reduced book value. Depreciation is charged on the reduced book value.
This has the effect of recognizing the grant in the profit and loss account
over the useful life of the asset by way of a reduced depreciation charge.
EX: If fixed asset worth Rs. 10 is purchased and the grant previously
received is Rs. 5, then
Voucher Type: RV
Particulars
Debit
Rs.

Relevant grant/donation A/c
To Cash A/c
5
5
Credit
Rs.
Books/registers
affected
Cash book
Fixed assets
register
10 Relevant general
ledger accounts
(Being the above asset

purchased from )
Alternatively, the grant amount is treated as deferred income and brought
into the profit and loss account on a systematic basis over the useful life of
the asset with depreciation being charged on the gross book value of the
asset. The balance grant is disclosed separately in the balance sheet.
43
EX: In the above case if the useful life of the asset is 5 years, then
Voucher Type: JV
Particulars
By Relevant grant/donation A/c
Debit
Rs.
Credit
Rs.
To Profit & Loss A/c
Books/registers
affected
Relevant general
ledger accounts
(Being grant/donation
recognized to P&L A/c over the
useful life of the asset years)
8.4.5 Entry for fixed assets acquired as trade-in for old assets (exchange of old
asset for new asset).
When a fixed asset is acquired in exchange for another asset, its cost is
usually determined by reference to the fair market value of the
consideration given. It may be appropriate to consider also the fair market
value of the asset acquired if this is more clearly evident. An alternative
accounting treatment that is sometimes used for an exchange of assets,
particularly when the assets exchanged are similar, is to record the asset
acquired at the net book value of the asset given up; in each case an
adjustment is made for any balancing receipt or payment of cash or other
consideration.
When a fixed asset is acquired in exchange for shares or other securities in
the enterprise, it is usually recorded at its fair market value, or the fair
market value of the securities issued, whichever is more clearly evident.
EX: If there is an indicated loss.
Old equipment
Book value of old equipment
Fair value of old equipment
Trade-in/exchange value
New equipment
List price
Cash payment
Rupees
30
25
28
Rupees
100
72
Voucher Type: PV
Particulars
Debit
Rs.
97
5
By Relevant fixed asset (new)

A/c
Loss on sale of fixed asset
To Relevant fixed asset (old) A/c
Cash A/c
44
Credit
Rs.
Books/registers
affected
Fixed
asset
register.
Cash book
Relevant general
ledger accounts
30
72
EX: If there is an indicated gain

Old equipment
Book value of old equipment
Fair value of old equipment
Trade-in/exchange value
New equipment
List price
Cash payment
Rupees
20
25
28
Rupees
100
72
Voucher Type: PV
Particulars
Debit
Rs.
92
By Relevant fixed asset (new)

A/c
Credit
Rs.
Books/registers
affected
Fixed
asset
register
Cash book
20 Relevant general
ledger accounts
72
To Relevant fixed asset (old) A/c

Cash A/c
8.4.6 Entry for providing for depreciation on fixed assets.
EX: If depreciation of Rs. 5 are to be provided.
Voucher Type: JV
Particulars
Debit
Rs.
By Depreciation on Properties
A/c
To Relevant fixed asset A/c
Credit
Rs.
Books/registers
affected
Depreciation
chart
Relevant general
5
ledger accounts
(Being depreciation provided on

the above fixed assets as per the
depreciation chart)
8.4.6 (a) Entry for charging above depreciation amount to P & L A/c
Voucher Type: JV
Particulars
Debit
Rs.
By P & L A/c
To Depreciation on properties
A/c
(Being depreciation amount
charged to P & L A/c)
45
Credit
Rs.
Books/registers
affected
Depreciation
chart
5 Relevant general
ledger accounts
8.4.7 Entry for disposal of fixed assets at more than book value.
EX: If fixed assets worth Rs. 50 are sold for Rs. 55.
Voucher Type: RV
Particulars
Debit
Rs.
55
By Cash A/c
Capital reserve A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant fixed
50
assets register
5 Relevant general
ledger accounts
(Being sale of above asset to )

8.4.8 Entry for disposal of fixed assets at less than book value.
EX: If fixed assets worth Rs. 50 are sold for Rs. 45.
Voucher Type: RV
Particulars
Debit
Rs.
45
5
By Cash A/c
Loss on sale of fixed asset A/c
Credit
Rs.
Books/registers
affected
Cash book
Relevant fixed
assets register
50 Relevant general
ledger accounts
(Being sale of above asset to )

8.4.9 Entry on upward revaluation of fixed assets.
EX: If fixed assets worth Rs. 50 are revalued at Rs. 60.
Voucher Type: JV
Particulars
Debit
Rs.
10

To Revaluation Reserve A/c
(Being revalued amount of fixed
assets transferred to capital
reserve A/c)
46
Credit
Rs.
Books/registers
affected
Relevant fixed
assets register
10 Relevant general
ledger accounts
8.4.10
Entry upon downward revaluation of fixed assets.
EX: If fixed assets worth Rs. 50 are revalued at Rs. 40.

Voucher Type: JV
Particulars
Debit
Rs.
10
By Loss on revaluation of fixed

asset A/c
Credit
Rs.
Books/registers
affected
Relevant fixed
assets register
Relevant general
10
ledger accounts
(Being fixed assets stated at

revalued amount and charged to
P&L A/c to the extent of
revalued amt.)
8.4.11
Entry upon downward revaluation of fixed assets after upward
revaluation.
EX: If fixed assets worth Rs. 60 which were revalued from Rs. 50 previously
are revalued at Rs. 40.
Voucher Type: JV
Particulars
Debit
Rs.
10
10
By Revaluation reserve A/c

Loss on revaluation of fixed
asset A/c
Credit
Rs.
20
Books/registers
affected
Relevant fixed
assets register
Relevant general
ledger accounts

revalued amount and charged to
capital reserve A/c to the extent
of previous upward revaluation
and balance to P&L A/c. ...)
A decrease in net book value arising on revaluation of fixed assets is
charged to profit and loss statement except that, to the extent that such a
decrease is considered to be related to a previous increase on revaluation
that is included in revaluation reserve, it is charged against that earlier
increase.
47
8.4.12
Entry upon upward revaluation of fixed assets after previous
downward revaluation.
EX: If fixed assets worth Rs. 40 which were revalued from Rs. 50 previously
are revalued at Rs. 60.
Voucher Type: JV
Particulars
Debit
Rs.
20
By Fixed asset A/c
Credit
Rs.
Books/registers
affected
Relevant fixed
assets register
10 Relevant general
ledger accounts
10
To Profit on revaluation of fixed

asset A/c
Revaluation Reserve A/c
revalued amount and credited to
profit on rev. to the extent of
previous downward revaluation
and balance to capital reserve
A/c ...)
It sometimes happens that an increase to be recorded is a reversal of a

previous decrease arising on revaluation which has been charged to profit
and loss statement in which case the increase is credited to profit and loss
statement to the extent that it offsets the previously recorded decrease.
8.4.13
Entry for writing off/retirement fixed assets.
EX: If fixed assets worth Rs. 10 are written off/retired from use.
Voucher Type: JV
Particulars
Debit
Rs.
10
By Fixed assets written off A/c

(Being fixed assets written off as
per approval dt. )
48
Credit
Rs.
Books/registers
affected
Relevant fixed
assets register
10 Relevant general
ledger accounts
8.5
INVESTMENTS
8.5.1 Entry for investments made.

EX: A sum of Rs. 50 is invested.
Voucher Type: PV
Particulars
Debit
Rs.
10
By Relevant Investment A/c
Credit
Rs.
Books/registers
affected
Cash book/Bank
book
10 Investment
register
Relevant general
ledger accounts
To Cash/Relevant Bank A/c

(Being investments made in
maturing on carrying an
interest rate of [wherever
applicable])
8.5.2 Entry for providing for dividend/interest income and subsequent receipt.
EX: A sum of Rs. 5 is receivable on investments before TDS of Rs. 1 (if
applicable).
Voucher Type: JV
Particulars
By Interest/income receivable on
investments A/c
TDS on income of PACS A/c
Debit
Rs.
Credit
Rs.
Books/registers
affected
Cash book/Bank
book
Investment
register
Relevant general
5
ledger accounts
4
1
To Dividend on
Investments/Interest on deposits
with Banks etc. A/c
(Being interest/income on
investments receivable after
deduction of TDS of Rs. for
the period from )
Voucher Type: RV
Particulars
Debit
Rs.
By Cash/Bank A/c
To Interest receivable on
investments A/c
(Being interest/income on
investments received)
49
Credit
Rs.
Books/registers
affected
Cash book/Bank
book
4 Relevant general
ledger accounts
8.5.3 Entry for providing for depreciation on investments.

EX: A sum of Rs. 10 is to be provided as depreciation on investments.
Voucher Type: JV
Particulars
Debit
Rs.
10

To Provision for depreciation on
investments A/c
Credit
Rs.
Books/registers
affected
Relevant general
ledger accounts
10
(Being provision made towards

depreciation on [investments]
at the rate of due to )
8.5.4 Entry for writing back depreciation provided on investments.
EX: A sum of Rs. 5 provided as depreciation is written back.
Voucher Type: JV
Particulars
By Provision for depreciation on
investments A/c
To Profit & Loss A/c
Debit
Rs.
Credit
Rs.
5
5
(Being provision made towards

depreciation on [investments]
now written back due to )
50
Books/registers
affected
Relevant general
ledger accounts
9.
DEFINITIONS OF ACCOUNTING TERMS
i)
Account is the detailed record of a particular asset, liability, owners'

equity, revenue or expense.
ii)
Accrued Expenses are expenses incurred during an accounting period

for which payment is to be made in the succeeding period.
iii)
Accrued Income is income earned during an accounting period but not

received by the end of the period.
iv)
Accrued Interest is interest earned but not paid since the last due date.
v)
Accounting Cycle is the sequence of steps starting from opening of

books at the start of a period and culminating in preparation of the
financial statements for a given period. It refers to the fact that because
financial reports are prepared at the end of each period (usually a year)
there are a sequence of steps (cycle) taken each period that result in the
reports and preparation for the next period or cycle. The cycle goes through
the journal entries, adjusting entries, posting to the accounts and financial
reports.
vi)
Accounting Period is the time period for which accounts are prepared,
usually one year.
vii)
Appreciation is the increase in the value of an asset in excess of its

depreciable cost, which is due to economic, and other conditions, as
distinguished from increases in value due to improvements or additions
made to it.
viii)
Balance the difference between the totals of the credit and debit sides of
an account.
ix)
Books Of Account are the financial records of a business. Usually refers

to the lowest level of recorded data, before summaries are made.
x)
Book keeping is the systematic and chronological recording of all

financial transactions.
xi)
Book Value is an accounting term which usually refers to cost as

appearing in the books of account or financial statements.
xii)
Brought Forward is the recognition of a value that was determined in the

past, e.g. an accumulated balance brought forward at the start of a new
accounting period.
xiii)
Bad Debt is an account balance or loan receivable that is not realisable.
xiv)
Capital Asset is a long-term asset that is not purchased or sold in the

ordinary course of business or not held for sale, conversion or consumption
in the ordinary course of business. Generally, it includes fixed assets, e.g.,
land, buildings, furniture, equipment, fixtures and furniture.
xv)
Credit, in accounting, is an accounting entry system that either

decreases assets or increases liabilities; In general, it is an arrangement for
deferred payment for goods and services.
xvi)
Credit Sales are merchandise or services sold on the promise to pay

later.
51
xvii)
Debit is a record of an indebtedness; specifically an entry on the lefthand side of an account constituting an addition to an expense or asset
account or a deduction from a revenue, net worth, or liability account.
xviii)
Depreciation is the amount of expense charged against earnings by a

company to write off the cost of a plant or machine over its useful life,
giving consideration to wear and tear, obsolescence, and salvage value.
xix)
Expenditure is a cost incurred in the normal course of business to

generate revenues.
xx)
Extraordinary Items are material items that are unusual in nature and
occur infrequently. Both characteristics must exist for an item to be
classified as an extraordinary item on the income statement.
xxi)
Fair Market Value is the price at which a willing seller will sell and a
willing buyer will buy, in an arms- length transaction, when neither is
under compulsion to sell or buy and both have reasonable knowledge of
relevant facts.
xxii)
Fixed Overhead is those costs like rent, utilities, basic telephone, etc.,
that do not vary with the volume of sales. Variable overhead, on the other
hand, are those costs which vary directly with production or volume of
sales.
xxiii)
General Ledger is the ledger that contains all of the financial accounts of
a business; contains offsetting debit and credit accounts (including control
accounts).
xxiv)
Inventory Obsolescence is when inventory is no longer saleable for any

reason.
xxv)
Interest Accrued But Not Due means that portion of interest income on
loans and advances which has accrued for the accounting period but has
not become due for payment by borrower.
xxvi)
Impairment Of Value is the permanent decline in the value of an asset.
xxvii)
Liability, in accounting, is a loan, expense, or any other form of claim on

the assets of an entity that must be paid or otherwise honoured by that
entity.
xxviii) Posting is the transfer of accounting entries from a journal of original
entry into a ledger book, in chronological order according to when they

were generated.
xxix)
Pre-Paid Expenses are expenses that are paid in advance. Typically,

insurance premiums are paid in advance of the coverage contained in the
policy. Prepaid Expenses is a Current Asset for the business. This is
because it paid in advance for something for which someone owes the
service.
xxx)
Provisions as distinct from reserves, are a charge on the Profit and Loss
Account and are made for providing for depreciation, renewal or diminution
in the value of assets, or to provide for known liabilities. If the amount of
liability is not known or ascertainable in certain terms, only that amount is
provided for as is considered by the management as reasonably necessary
52
for the purpose. Any provision that is in excess of this amount should be
treated as a reserve.
xxxi)
Provision for doubtful Debts is an account established to record debts

which are considered doubtful of recovery.
xxxii)
Sundry Creditors are trade accounts of businesses representing

obligations to pay for goods and services received.
xxxiii) Sundry Debtors is a current asset representing money due for services
performed or merchandise sold on credit.

xxxiv) Voucher is a piece of substantiating evidence; a proof or a written record
of expenditure, disbursement, or completed transaction or a written

authorization or certificate, especially one exchangeable for cash or
representing a credit against future expenditures.
xxxv) Work In Progress a piece of work that is not yet finished.
xxxvi) Write-Off is to decrease the value of an item, e.g., a bad debt write-off
decreases the sundry debtors amount, a vehicle involved in an accident

and declared a write-off if the cost to repair is in excess of the value of the
vehicle etc.
53
10.
Formats / Steps involved in Book-keeping

Appendix 1
Format of Cash/Bank Receipt Voucher (RV)
The_________________ Co-operative Society Ltd. _________________Regd. No.
RECEIPT VOUCHER
No.___________________________________
S. No.
Head of Account
Dated_____________________________
Cash book/
Debit
Credit
Ledger Folio No.
(Rs.)
(Rs.)
(Narration to be written here)
Received Rupees
only
Place:
Signature of Receiver
Authorised Signatory
The above voucher type should be used to record all Cash/bank receipts except cash deposits
by account holders and loan repayment by borrowers for which pay-in-slip should be used. For
cash withdrawals from bank A/c contra voucher should be used.
Separate colouring to be used for the voucher type.
Chronological numbering of vouchers to be strictly adhered to.
54
Appendix 2
Format of Cash/Bank Payment Voucher (PV)
PAYMENT VOUCHER
No.___________________________________ Dated_____________________________
S. No.
Head of Account
Cash book/
Debit
Credit
Ledger Folio No.
(Rs.)
(Rs.)
Paid Rupees
only
Place:
Signature of Payee
Every payment recorded in the day book should be supported by proper voucher which is a
documentary evidence for payment.
The voucher shall include proper narration disclosing nature of payment, mode of payment,
bill. no., name of the party and the account on which it is made.
If the payment exceeds Rs. 500, revenue stamp should be affixed and signature of recipient
should be obtained.
The above voucher type should be distinguished from other voucher type by way of colouring.
Vouchers to be chronologically numbered.
55
Appendix 3
Format of Contra Voucher (CV)
CONTRA VOUCHER
No.___________________________________
S. No.
Head of Account
Dated_____________________________
Folio No.
Debit
Credit
(Rs.)
(Rs.)
Rupees
only
Place:
The above voucher should be used to record all cash deposits and withdrawals from bank
account.
Separate coloring to be used for the voucher type.
56
Appendix 4
Format of Purchases Voucher (PUV)
PURCHASES VOUCHER
No.___________________________________
S. No.
Head of Account
Dated_____________________________
Cashbook/
Debit
Credit
Purchase Reg./
(Rs.)
(Rs.)
Sundry creditors
L.F. No.
Rupees
only
Place:
All purchases to be routed through the above voucher except cash purchases for which
payment voucher should be used.
Purchase bills, delivery challans. and other documentary evidence should be attached to the
voucher.
57
Appendix 5
Format of Sales Voucher (SV)
SALES VOUCHER
No.___________________________________
S. No.
Head of Account
Dated_____________________________
Cash book/ Sales
Debit
Credit
Reg./ Sundry
(Rs.)
(Rs.)
debtors L.F. No.
Rupees
only
Place:
All sales to be routed through the above voucher except cash sales for which receipt voucher
should be used.
Sales bill, delivery challans. and other documentary evidence should be attached to the
voucher.
58
Appendix 6
Format of Journal Voucher (JV)
JOURNAL VOUCHER
No.___________________________________
S. No.
Head of Account
Dated_____________________________
Ledger Folio No.
Debit
Credit
(Rs.)
(Rs.)
Place:
Journal vouchers are used to record those transactions that cannot be passed through any
other voucher type. For instance, period end adjustments, closing entries, provisions,
depreciation etc. are passed through journal vouchers.
The above voucher type should be distinguished from other voucher type by way of coloring.
59
Appendix 7
Format of Debit Note/Credit Note (DN/CN)
DEBIT / CREDIT NOTE

No.___________________________________
S. No.
Head of Account
Dated_____________________________
Ledger Folio No.
Debit
Credit
(Rs.)
(Rs.)
Place:
Debit notes should be used to record purchases returns, passing on any expenses to other
parties or in response to the credit notes issued by other parties etc.
Credit notes are issued stating that a particular customer is entitled to certain sum as credit for
sales returns, discounts etc. credit notes are also issued in response to debit notes issued by
other parties.
Separate coloring to be followed for above voucher type.
60
Appendix 8
Format of Cash withdrawal form (CWF)
FRONT SIDE:
No.
PASS BOOK MUST ACCOMPANY THIS WITHDRAWAL SLIP
WITHDRAWAL SLIP
Date
Name
Branch
A/c No.
PAY ______________________________________________________________
Rupees____________________________________________________________
_______________________________________________________________only Rs. _____________
Place:_________________________
Date: _________________________
Folio: _________________________
BACK SIDE:
I authorize _________________________ (whose signature is attested below) to receive the payment
of amount mentioned overleaf.
Signature of authorized agent
Depositor
61
Appendix 9
Format of Pay-In Slip (PIS)
Front Side
The_____co-op. society Ltd. ____Regd. No.
PAY-IN-SLIP
PAY-IN-SLIP
Credit SB/FD/RD/RID A/c No.
Date
Of
(in words only)
Rupees
Of
(in words only)
Date
Rupees
only.
only.
as per details furnished overleaf.
By cash
Rs.
Ps.
Rs.
Ps.
Signature of remitter
Accountant
Entered by
Accountant
LF No.
62
Contd.
Back side
DENOM.
1000 x
500 x
100 x
50 x
20 x
10 x
5x
2x
1x
Coins
Grand Total
Cheque
/DD
No.
Date
No.
Drawn on
(Name of
the Bank
Rs.
Place
Ps.
DENOM.
1000 x
500 x
100 x
50 x
20 x
10 x
5x
2x
1x
Coins
Grand Total
Amount
Cheque
/DD
No.
(Rs.)
No.
Date
Rs.
Drawn
on
(Name
of
the
Bank
The above voucher should be used for all deposits by accountholders.

Use separate vouchers for cash deposits and deposits through cheques
63
Ps.
Place
Amoun
t
(Rs.)
Appendix 9 A
Format of Pay-In Slip (PIS)
Front Side
The_____co-op. society Ltd. ____Regd. No.
PAY-IN-SLIP
PAY-IN-SLIP
Date
Of
(in words only)
Rupees
Of
(in words only)
Date
Rupees
only.
only.
By cash
Rs.
Ps.
Rs.
Ps.
Accountant
Entered by
Accountant
LF No.
64
Contd.
Back side
Denom. No.
Rs.
Ps.
Denom. No.
1000 x
1000 x
500 x
500 x
100 x
100 x
50 x
50 x
20 x
20 x
10 x
10 x
5x
5x
2x
2x
1x
1x
Coins
Coins
Grand
Total
Grand
Total
Cheque
/DD
No.
Date
Drawn on
(Name of
the Bank
Place
Amount
(Rs.)
Cheque
/DD
No.
65
Date
Rs.
Drawn
on
(Name
of
the
Bank
Ps.
Place
Amoun
t
(Rs.)
Appendix 10
ILLUSTRATION No. 1
Deposits:
Mr. X has deposited an amount of Rs. 1000 as fixed deposit on 1/2/07 in cash on which interest is
payable on monthly basis at the rate of 5 % p.a. The deposit is for a period of 2 months maturing
on 31/3/07. The deposit has been repaid on 31/3/07.
The various steps involved in book keeping starting from voucher generation, account opening,
ledger posting, interest accounting and payment and repayment of fixed deposit is summarized
below.
66
Step 1:
Voucher generation at the time of depositing.

Pay-In Slip
Front Side
The ABC Co-op. Society Ltd. 123 Regd. No.
The ABC Co-operative Society Ltd. 123 Regd. No.
PAY-IN-SLIP
PAY-IN-SLIP
Credit FD A/c No.
Of
Date
X X
1/2/07
Mr. X
Rupees
(in words only)
Credit FD A/c No.
Of
One thousand---------------------------
Date
X X
Mr. X
Rupees
(in words only)
One thousand--------------------------------------------------------------------------------
only.
Rs.
only.
By cash
Accountant
Ps.
Rs.
XXXXX
Ps.
Entered by
67
L.F.No.
XXXXXX
X XXXX
X XXXXX
Accountant
1/2/07
XXXXXXX
-
Back side
Denom. No.
Rs.
Ps.
1000 x
500 x
Denom. No.
1000
00
500 x
100 x
50 x
50 x
20 x
20 x
10 x
10 x
5x
5x
2x
2x
1x
1x
Coins
Coins
Grand
Total
Date
Ps.
1000
00
1000
00
1000 x
100 x
Cheque
/DD
No.
Rs.
1000
Drawn on
(Name of
the Bank
Place
00
Amount
(Rs.)
Grand
Total
Cheque
/DD
No.
68
Date
Drawn
on
(Name
of
the
Bank
Place
Amoun
t
(Rs.)
Step 2:
Cash book entry at the time of accepting deposit.
CASH BOOK
Date:
RECEIPT
S.
No.
PAYMENT
Particulars
Opening cash
1
FD
A/c
XXXXX
Rs.
No.
N
0
P.
I
0
L
0
Initials of
authorised
person/s
S.
No.
XXXXX
X
Total
Cash in Hand
1
1
0
0
0
0
0
0
69
0
0
0
0
Total
XXXXX
X
Token
No.
Particulars
Rs.
P.
Initials of
authorised
person/s
Step 3:
Entry in Deposit ledger at the time of accepting deposit.

DEPOSIT LEDGER
Type of Deposit
DUE ON
Fixed deposit
Date of Opening:
01 / 02 /07
0 1 0 2 2 0 0 7
Name and Address:
Mr. X
FROM
Jointly with
TO
PHOTO
3
0
0
3
5
PERIOD
Interest Rate in % p.a.
1 0 3 2 0 0 7
2 MONTHS
1 0 2 2 0 0 7
1 0 3 2 0 0 7
Rs.
AMOUNT DEPOSITED
PAYMENT INSTRUCTIONS:
Monthly intrest payment
TOTAL INTEREST
E OR S/A OR S
..
MATURITY VALUE
1 0 0 0
8
1 0 0 8
3 1 0 3 2 0
Date of maturity
PARTICULARS OF LIEN
LOAN A/c. No.
Date of
Sanction
Date of
Release
P.
0
0
0
0
0
0
0
7
Nomination Particulars
Initials
Name of Nominee
Relationship with Depositor
Address of Nominee
If Nominee is minor:
Date of birth of minor
DATE
Name and Address of Guardian

AMOUNT
PARTICULARS/ Instalment
DEPOSITED
Rs.
1/2/2007 Cash
BALANCE
WITHDRAWN
P.
Rs.
P.
- 1 0 0 0 0 0
Step 4:
Rs.
P.
- 1 0 0 0 0 0 XXXXX
X
General Ledger Posting (Fixed deposits).

GENERAL LEDGER
Head of Account: Fixed deposits
Date
Particulars
1/2/07 Cash deposits
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
-----
1000
1000
XXX
70
Initials of
authorized
person/s
Step 5:
For payment of interest of Rs. 4 on 28/2/07 voucher should
be raised in the following manner for recording the transaction.
PAYMENT VOUCHER
66
No.:
S.
No.
1
2
Dated: 28/02/07
Cash book/
Ledger Folio No.
Head Of Account
Interest on deposits-FD
Cash
Debit
(Rs.)
XXX
XXX
Credit
(Rs.)
4
4
Being payment of interest on FD No. XXX for the period from 1/2/07 to 28/2/07 at the rate of 5%.
Paid Rupees
Place:
Four------------------------------------------------------------------------------------------------------------
XXX
only
XXX
Signature of Payee
XXX XXX
71
Step 6:
Cash book entry.
CASH BOOK
Date:
RECEIPT
S.
No.
PAYMENT
Particulars
Rs.
Opening cash
1
P.
Initials of
authorised
person/s
XXX
S.
No.
2
1
Total
Cash in Hand
0
6
0
0
0
0
Particulars
Rs.
Interest on
deposits
Step 7:
Token
No.
Total
P.
Initials of
authorised
person/s
XXX
XXX
Ledger entry at the time of interest payment.

INTEREST PAYMENT / ACCRUAL
Date of
Payment
Period
From
Product
To
28/02/07 0 1 0 2 0 7 2 8 0 2 0 7
72
Rs.
Interest
P.
Rs.
Progressive
total
P.
4 0 0
Initials of
authorised
person/s
XXX
Step 8:
General Ledger posting.

Head of Account: Interest on deposits - FD
Date
Particulars
Day Book
Folio No.
28/2/07 Cash payment
XXX
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
Step 9:
Closure of deposit.
Step 9A:
Repayment of deposit and payment of interest
XXX
Payment voucher should be raised in the following manner.

PAYMENT VOUCHER
95
No.:
S.
No.
Dated: 31/03/07
Cash book/
Ledger Folio No.
Head Of Account
1
2
Relevant FD A/c
Interest on deposits FD for March 2007
XXX
XXX
Cash A/c
XXX
Debit
(Rs.)
Credit
(Rs.)
1000
4
1004
Being repayment of FD A/c No. XXX of Mr. X.
Paid Rupees
Place:
One thousand and four ---------------------------------------------------------------------------------------------------
XXX
only
XXX
Signature of Payee
XXX
73
Step 9B:
Cash book entry
CASH BOOK
Date:
RECEIPT
S.
No.
PAYMENT
Particulars
Rs.
Opening cash
1
P.
Initials of
authorised
person/s
XXX
S.
No.
Total
Cash in Hand
Rs.
Interest on
Deposits
Total
AMOUNT
DEPOSITED
Rs.
1/2/2007 Cash
31/3/2007 Cash
BALANCE
WITHDRAWN
P.
- 1 0 0 0 0 0
Rs.
P.
Rs.
P.
- 1 0 0 0 0 0
- 1 0 0 0 0 0 - - - - - - -
General ledger posting

Head of Account: Fixed deposits
Date
Particulars
1/2/07 Cash deposits

74
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
XXX
----1000
1000
1000
NIL
XXX
XXX
Initials of
authorised
person/s
XXX
XXX
PARTICULARS/ Installment
P.
Ledger entry
DATE
Step 9D:
Particulars
FD A/c. No.
XXX
Step 9C:
Token
No.
Initials of
authorized
person/s
XXX
XXX
Repayment of Interest
Step 9 E:
Ledger entry at the time of interest payment.

INTEREST PAYMENT / ACCRUAL
Date of
Payment
Period
From
Product
To
Rs.
Interest
P.
Rs.
P.
31/03/07 0 1 0 3 0 7 3 1 0 3 0 7
Step 9 F
Progressive
total
4 0 0
XXX
General Ledger posting

Head of Account : Interest on deposits FD
Date
Particulars
75
Day Book
Folio No.
Debit
Rs.
XXX
Credit
Rs.
Initials of
authorised
person/s
Balance
Rs.
Initials
XXX
ILLUSTRATION No. 2
Loans:
Mr. Y has borrowed a sum of Rs. 1,000 from the society as MT loan on 1/4/07 carrying a simple
interest rate of 12 % p.a. which becomes due for payment along with interest on 31/3/08..
The steps involved would be:
Step 1:
Payment voucher generation for disbursement of loan.

PAYMENT VOUCHER
No.:
S.
No.
1
2
Dated: 01/04/07
Cash book/
Ledger Folio No.
Head Of Account
Relevant MT loan
Cash
XXX
XXX
Debit
(Rs.)
Credit
(Rs.)
1000
1000
Being disbursement of Rs. 1000 as MT loan no. XXX agst. Sanction Ref. No. XXX
Paid Rupees
Place:
One thousand ---------------------------------------------------------------------------------------------------
XXX
only
XXX
Signature of Payee
XXX
76
Step 2:
Entry in cash book.
CASH BOOK
Date: 0
RECEIPT
S.
No.
PAYMENT
Particulars
Opening cash
1
Rs.
P.
Initials of
authorised
person/s
S.
No.
Token
No.
Particulars
Rs.
P.
XXX
1
MT loan No. XXX

disbursed
Total
Cash in Hand
77
Initials of
authorised
person/s
Total
XXX
XXX
Step 3:
Entry in medium term disbursement cum loan ledger.
1
XXX
Membership. No.:
Mr. Y
Name of Borrower:
XXX
Address:
XXX
Village:
Maximum Borrowing Power as on date of sanction: 1,000
Loan No.:
Loan amount
sanctioned
Purpose
Cost of
Investment
XXX
XXX
1,000
Resolution No. & Date:

D.C.C.B. Loan No.:
XXX
XXX Wet:
XXX
XXX
XXX
XXX
XXX
Name of village where land is situated:

Total holding(Acre):
Value of the property:
Whether assignee of land:
Mortgage Deed No. & Date. (for LT Loan):
Extent Mortgaged (for LT loan):
Remarks:
XXX
XXX Dry: XXX
Ledger entry (Loan disbursement).
Date
Particulars
1/4/2007
Cash
Step 5:
1,000
Benefiting
area
1
XXX
1
Disbursement Voucher No.:
Step 4:
Loan
amount
Debit
Credit
1000
Balance
No. of
days
Products
Interest
Initials
Due
Recd
8
9
10
1000
XXX
General ledger posting (MT Loan disbursement)

Head of Account: MT loans
Date
Particulars
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
1000
1000
XXX
78
Step 6: For recording interest due on loans on 31/3/08 the following

journal voucher should be raised.
The ABC Co-operative Society Ltd. 123 Regd. No..
JOURNAL VOUCHER
50
No.
S. No.
1
2
Dated 31/03/08
Ledger Folio No.
Head Of Account
Debit
(Rs.)
Non-overdue-interest receivable on loans

Interest on loans & advances
Credit
(Rs.)
120
120
Being interest from 1/4/07 to 31/3/08 being accounted on MT Loan of Mr. Y at the rate of 12 %.
Place:
XXX
XXX
Step 7:
Ledger entry (For interest due)
Date
Particulars
1/4/2007
31/3/2008
Cash
Interest
due
Step 8:
Debit
Credit
1000
Balance
No. of
days
Products
Interest
Initials
Due
Recd
8
9
10
1000
XXX
XXX
120
General ledger posting for accounting for interest income.

Head of Account: Non-overdue interest due on loan & advances
Date
Particulars
31/03/08 Interest on loans
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
120
120
XXX
Head of Account: Interest on loan & advances

Date
Particulars
31/03/08 Non-overdue interest due

on loans
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
120
120
XXX
79
Step 9:
Repayment of loan on 31/3/08.
Step 9A:
Receipt voucher should be raised.

RECEIPT VOUCHER
No. 95
S. No.
Dated 31/03/08
Cash book/
Ledger Folio No.
Head Of Account
1
2
3
Debit
(Rs.)
Cash
MT Loan No. (name)
Non-overdue interest due on loans
Credit
(Rs.)
1,120
1,000
120
Being interest and principal repaid in above MT loan.
Received Rupees
Place:
One thousand one hundred and twenty-------------------------------------------------------
XXX
only
XXX
Signature of Receiver
XXX
Step 9B:
Date
Ledger entry on repayment of principal and interest.

Particulars
1/4/2007
31/3/2008
Cash
Interest
due
Cash
31/3/2008
Debit
Credit
1000
Balance
No. of
days
Products
Interest
Initials
Due
Recd
8
9
10
1000
XXX
XXX
120
1000
NIL
120
Step 10: General ledger posting.

Head of Account: MT loans
Date
Particulars

31/03/08 Cash receipt
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
XXX
1000
-
1000
1000
NIL
XXX
XXX
Head of Account: Non-overdue interest due on loan & advances

Date
Particulars
31/03/08 Interest on loans

31/03/08 Cash
Day Book
Folio No.
Debit
Rs.
Credit
Rs.
Balance
Rs.
Initials
XXX
XXX
120
-
120
120
NIL
XXX
XXX
80
XXX
ANNEXURE - I
TRIAL BALANCE as on
(Last working day of the month)
Month: _______
Year: _________
LIABILITIES & INCOME

(Amount in Rs.)
Head of account in
GL
(As per the
prescribed list)
Folio No.
Opening
Balance at the
beginning of
the month
Total of Debit
during the
month
Total of Credit
during the
month
Closing
Balance
6 (3+5-4)
Opening
Balance at the
beginning of
the Month
3
Total of Debit
during the
month
Total of Credit
during the
month
Closing
Balance
6 (3+4-5)
ASSETS & EXPENDITURE

(Amount in Rs.)
Head of account in
GL
(As per the
prescribed list)
1
Folio No.
Note: No additional heads of accounts of GL to be added, other than prescribed in

Annexure VII
81
ANNEXURE - II
TRADING ACCOUNT
For the month of _______________ Year ______________
Particulars
Amount (Rs.)
Current
Year
Particulars
Previous
Year
Amount (Rs.)
Current
Year
1. Opening Stocks
(i) Fertilizers
(ii) Seeds
(iii) Pesticides
(iv) PDS Commodities
(v) Non-PDS consumer items
(vi) Foodgrains & other
commodities under Govt.
Procurement Scheme
(vii) Material under Mid-day Meal
scheme
(viii) Any other stocks of raw
materials and work-in-process
2. Purchases A/c
2(a) Stock/Raw Material [(i) to (vii)]
(i) Fertilizers
(ii) Seeds
1 Sales A/c. including Sales Tax

1(a) Stock/Raw Material [(i) to (vii)]
(i) Fertilizers
(ii) Seeds
(iii) Pesticides
(v) Non PDS consumer items
(iii) Pesticides
4. Gunny Bags Sales

(v) Non PDS consumer items
(vi) Foodgrains & other commodities
under Govt. Procurement Scheme
(vii) Mid-day Meal scheme
2(b) Less Purchase Returns
2 (c) Net Purchases [2(a)-2(b)]
3. Transport and other expenses on
purchases.
4.Salary for Salesman/
Manufacturing wages
5. Factory expenses
5. Other Trading Income

6. Closing Stock
6.a. Gross Stock [(i) to (viii)]
Previous
Year

(vii) Food Products under Mid-day Meal
scheme.
1(b) Less Sales Returns
1(c) Net Sales [1(a)-1(b)]
2. Commission
3. Compensation
(i)
(ii)
(iii)
(iv)
Fertilisers
Seeds
Pesticides
PDS Commodities
(v) Non-PDS consumer items
9. Licence Fee

(vii) Material under Mid-day Meal
scheme
(viii) Any other stocks of raw materials
and work-in-process
6.b. Less: Value of stock in deficit and
reduction in value of damaged /
rejected stocks.
6.c. Net Closing Stock [6(a)-6(b)]
10.Interest on borrowings for the

non-credit activities
11. Other expenses
12. Trading Gross Profit carried to
main Profit & Loss Account
Total
7. Trading Loss carried to the main

Profit & Loss Account
Total
6.Insurance for Stocks, Godown

7. Godown rent
8. Electricity charges
*This is a composite format of manufacturing and trading profit and loss account relating to all activities. Where appropriate, separate
accounts may be drawn up for manufacturing and trading.
82
ANNEXURE III
FORMAT OF PROFIT AND LOSS ACCOUNT OF PRIMARY AGRICULTURAL CREDIT
SOCIETY (PACS) for the year ended 31 March 200__
Expenditure
Amount (Rs.)
Income
Current Previous
Year
Year
1. Gross loss transferred from Trading
a/c
2. Interest (paid and payable) on
i. Deposits
ii. Borrowings from DCCB / SCB*
iii. Loans availed from State
Government
iv. Borrowings from others
1. Gross profit transferred from

Trading a/c
2. Interest on Loans and Advances
(Received and Receivable)
3.Establishment and other Expenses
3. Income on Investments
3.i. Salary and Allowances including

Contribution to PF, Bonus, Gratuity or
Pension Fund
3.ii. Management expenses (expenditure
relating to board meetings etc)
4. Rent, Taxes, Electricity and Repair
Costs on Premises
5. Insurance
3(i) Interest on Deposits with Banks /

institutions
6. Law charges
6. Miscellaneous Income (specify

details in annexure)
3(ii) Dividend on other investments

4. Rental Income
5. Admission Fees
7. Postage and telephone charges

8. Printing and Stationery
9. Audit Fees
10. Vehicle expenses
11. Traveling & Conveyance expenses
12. Donations and Subscriptions
13. Depreciation on properties
14. Other expenses
15. Provisions for
i. Standard assets
ii. NPA
ii(a) Sub standard assets
ii(b) Doubtful debts
ii(c) Loss Asset
iii. Bad and doubtful debts (credit sales)
iv. Bad and doubtful debts (others)
v. Depreciation in value of investments
vi. Overdue Interest on loans
vii. Overdue interest on investments
viii. Others (to be specified)
16. Profit for the year
Total
7. Loss for the Year

Total
* Applicable to PACS under two-tier system
83
Amount (Rs.)
Current Previous
Year
Year
Appropriation of Profits
Expenditure
Amount (Rs.)
Current
Year
Income
Previous
Year
1. Accumulated losses (previous

year)
1. Balance of profit (previous year)

2. Profit for the current year
2. Profit appropriated to
i.
Agricultural Credit
stabilization fund
ii.
Reserve fund
iii.
Dividend equalization fund
iv.
Other reserves/ funds (to be
specified)
v.
Dividend proposed on shares
vi.
3. Unclaimed dividend appropriated **
Sub-Total
3. Balance of profit carried to Balance

Sheet
Total
4. Balance of losses carried to Balance

Sheet
Total
84
Amount (Rs.)
Current
Year
Previous
Year
ANNEXURE IV
FORMAT OF BALANCE SHEET OF PRIMARY AGRICULTURAL CREDIT SOCIETY (PACS) as
on 31 March (year)
(Amount Rs.)
S.
No.
Liabilities
Breakup
1 Capital
i.
Authorised
ii.
Subscribed
iii.
Paid-up
a)
Individuals
b)
Government
c)
Others
2 Reserves and Funds (created out of surplus of PACS)
i.
Reserve Fund
ii.
Capital Reserve
iii.
Agricultural Credit Stabilisation Fund
iv.
Dividend Equalization Fund
v.
Common Good Fund
vi.
Building Fund (created out of surplus by PACS)
vii.
Others (to be specified)
3 Profit and Loss Account (if closing balance is profit)
4 Grants and other Funds
i.
ii.
iii.
iv.
v.
vi.
Provident Fund
Building Fund (received from State Government)
Recapitalisation Assistance Fund
Subsidies meant for Society
Subsidy meant for members
5 Deposits
i.
Savings Deposits
ii.
Recurring Deposits
iii.
Fixed Deposits
iv.
Reinvestment Deposits
v.
85
31 Mar 200'
31 Mar 200'
(Current
Year)
(Previous
Year)
S.
No.
Liabilities
Breakup
31 Mar 200'
31 Mar 200'
(Current Year) (Previous Year)
6 Borrowings
(a) Borrowings from DCCB / SCB*
i.
ST (SAO) / KCC Credit Limit
ii.
MT/LT Agri Loans
iii.
MT Conversion
iv.
MT/LT Reschedulement
v.
SHG Loans
vi.
Non farm sector Loans
vii.
Cash Credit Limit for procurement of Agricultural Produce
viii.
Cash Credit Limit for Gold Loans
ix.
Loans against deposits with DCCB / SCB
x.
Fertilizer Cash Credit Limit
xi.
Seeds Cash Credit Limit
xii.
Public Distribution Scheme CC Limit
xiii.
Consumer Commodities CC Limit
xiv.
Other non credit activities
xv.
Other borrowings from DCCB / SCB (to be specified)
(b) Borrowings from State Government
(c) Borrowings from Other Institutions (details in annexure)
7 Other Liabilities
i.
Interest Accrued on Deposits
ii.
Interest Accrued on Borrowings
iii.
Unclaimed Dividend
iv.
Sundry Creditors (details in Annexure)
v.
8 Bills for Collection (being Bills Receivable as per Contra)

9 Branch Adjustment Account
10 Provisions
i.
Provision for PF / Gratuity / Bonus / Pension
ii.
Provision for Standard Assets
iii.
Provision for Expenses
iv.
Total
86
Sr.
No
1 Cash on Hand
Assets
Breakup
2 Balances with DCC Bank / SCB *

i. Current Account
ii. Savings Account
3 Balances with Other Banks / Institutions
i. Current Account
ii. Savings Account
4 Investments
i. Government and Trustee Securities
ii. Shares in Other Cooperative Institutions (specify details in
annexure )
iii. Term Deposits with DCCB/ SCB * representing Reserve Funds
(Annexure)
iv. Term Deposits with DCCB / SCB* (other than Reserve
Funds)
v. Term Deposits with other banks
vi. NSC / KVP
vii. Staff PF balance with PF Trust / as deposit with Banks
viii. Others (Details in Annexure)
(a) Gross Investments
(b) Less: Provision for depreciation in the value of investment
(c) Investment net of provisions (a b)
5 Loans and Advances
i. ST (SAO) Loans / KCC Loans
ii. Medium Term / Long Term Agricultural Loans
iii. MT Conversion Loans
iv. MT /LT Reschedulement
v. Loans against pledge of agricultural produce
vi. SHG Loans
vii. Non-Farm Sector Loans
viii. Loans against Deposit
ix. Loans for Consumer Durables
x. Gold Loans
xi. Loans to Staff Members
xii. Other Loans (to be specified)
(a) Total
(b) Less: Provision for NPA
(c)Loans and Advances net of provisions (a b)
6 Closing Stocks
i. Agricultural Inputs (fertilisers, seeds and pesticides)
ii. Public Distribution System Commodities
iii. Non-PDS Consumer Items
iv. Food grains and other Commodities under Procurement
Scheme
v. Materials under Mid-day Meals Scheme
vi. Any other stocks/ work-in-progress/goods (item-wise details in
annexure)
(a) Total ( i to vi)
(b) Less: Reduction for value of shortage / damaged/degraded
stock
(c) Net closing stock (a) (b)
87
31 Mar 200x
(Current Year)
31 Mar 200x
(Previous Year)
Sr.
Assets
No
7 Fixed Assets (net of depreciation as per Depreciation Chart)
Breakup
31 Mar 200x
(Current Year)
31 Mar 200x
(Previous Year)
i. Land and Buildings / Godowns

ii. Furniture and Fixtures
iii. Computers and Electrical Installations
iv. Vehicles
v. Others (to be specified)
8 Other Assets
1(a) Interest Accrued and Receivable (i to iii)
i. Interest Accrued but not due on Standard Loans
ii. Interest accrued but not due on NPA Loans
iii. Overdue interest receivable
1(b) Less: Provision for overdue interest
1(c) Net interest Accrued and Receivable (a) (b)
2(a) Interest receivable on Investments
2(b) Less : Provision for overdue interest on investments.
2(c) Net Interest receivable on investments (a) (b)
3 Miscellaneous Income Receivable
4(a) Sundry debtors (for credit sales)
4(b) Less: Provision for bad and doubtful Sundry Debtors (for credit
sales)
4(c) Net Sundry debtors for credit sales {net of provision i.e. (a)-(b)}
5(a) Sundry debtors (others) - details in annexure
5(b) Less : Provision for bad and doubtful sundry debtors (others)
5(c) Net Sundry Debtors (others) (a b)
6 Prepaid expenses
7 Tax Deducted at source
8 Others
9 Bills Receivable (as per contra)
10. Branch Adjustments accounts
11 Profit and Loss Account (if balance is loss)
Total :
Note:
i)
Under Others, against various items of liabilities and assets only one amount will have to
be shown. If there are more that one items under Others, the same may be shown in the
Annexure.
ii)
Details of Sundry Creditors, Sundry Debtors etc., as specified in Balance Sheet may be
given in the Annexure.
88
List of Abbreviations
A/c
Agri
ALM
AM
Amt.
ARC
BC
BDR
BS
CAR
CAS
CCS
CN
Col.
Cr
CRAR
CRR
CV
CWF
DCB
DCCB/CCB
DN
Dr
Dt.
E or S
e.g.
EL
EP
EPF
Etc.
EWS
EX
Exp.
FD
FDR
GL
GLF
GoI
Govt.
HR
i.e.
ICS
JV
KCC
KVP
KYC
LA
LT
Account
Agricultural
Asset Liability Management
Accounting manual
Amount
Arbitration
Backward Communities
Bad Debts Reserve
Balance Sheet
Capital Adequacy Ratio
Common Accounting System
Co-operative Credit Structure
Credit Note
Column
Credit
Capital Risk Adequacy Ratio
Cash Reserve Ratio
Contra Voucher
Cash Withdrawal Form
Demand Collection Balance
District Central Co-operative Bank
Debit Note
Debit
Date
Either or Survivor
for example - abbreviation of Latin 'exempli gratia'
Earned Leave
Execution Petition
Employees Provident Fund
Et cetera and so forth
Early Warning System
Example
Expenses
Fixed Deposit
Fixed Deposit Receipt
General Ledger
General Ledger Folio
Government of India
Government
Human Resources
that is - the abbreviation i.e. comes from Latin 'id est'
Internal Control System
Journal Voucher
Kisan Credit Card
Kisan Vikas Patra
Know Your Customer
Liquid Assets
Long Term
89
M. No.
MBC
MC
MD
MF
MIS
Misc.
MT
MTC
MTC (R)
NABARD
NAFSCOB
No.
NPA
OBC
OD
P&L
PACS
PAN
PDS
PF
PI
PIS
PUV
PV
QVR
RBI
RCS
RD
Regn.
RID
RM
RMF
Rs.
RV
SAO
SB
SBI
SC
SCB
SDS
Secy.
SF
SHG
SLR
Sr. No.
SRO
ST
ST
Member Number
Most Backward Communities
Management Committee
Matured Deposits
Marginal Farmers
Management Information System
Miscellaneous
Medium Term
Medium Term Conversion
Medium Term Conversion Rephasement
National Bank for Agriculture and Rural Development
National Federation of State Co-operative Banks
Number
Non-Performing Assets
Other Backward Communities
Overdraft
Profit and Loss Account
Primary Agricultural Co-operative Credit Society
Permanent Account Number
Public Distribution System
Provident Fund
Performance Indicators
Pay-In-Slip
Purchases Voucher
Payment Voucher
Quarterly Verification Report
Reserve Bank of India
Registrar of Co-operative Societies
Recurring Deposit
Registration
Re-investment deposit
Risk Management
Risk Management Framework
Rupees
Receipt Voucher
Seasonal Agricultural Operations
Savings Bank
State Bank of India
Schedule Caste
State Co-operative Bank
State Department Scheme
Secretary
Small Farmers
Self Help Group
Statutory Liquidity Ratio
Serial Number
Sub Registrars Office
Short Term
Schedule Tribe
90
SV
TDS
Tel.
TOR
VAT
WDV
Sales Voucher
Tax Deducted at Source
Telephone
Terms of Reference
Value-Added Tax
Written down value
91

Manual On CAS For PACS

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Manual On CAS For PACS

Uploaded by

Copyright:

Available Formats

NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT

Department for Cooperative Revival and Reforms (DCRR)

NB.DCRR/ 667 /D 3 CAS/2007-08

Accounting entries for credit and non-credit activities

The Joint Secretary (FS), GoI, Ministry of Finance, Deptt. Of Economic

NATIONAL BANK FOR AGRICULTURE AND

Primary Agricultural Credit Societies

BASIC RECORDS TO BE MAINTAINED BY PACS

BASIC ACCOUNTING PRINCIPLES AND POLICIES

ACCOUNTING ENTRIES FOR CREDIT ACTIVITIES

ACCOUNTING ENTRIES FOR COMMON ACTIVITIES

DEFINITIONS OF ACCOUNTING TERMS

FORMATS / STEPS INVOLVED IN BOOK-KEEPING

Appendix 2 Format of Cash / Bank Payment

Appendix 3 Format of Contra Voucher

Appendix 4 Format of Purchases Voucher

Appendix 5 Format of Sales Voucher

Appendix 6 Format of Journal Voucher

Appendix 7 Format of Debit Note / Credit Note

Appendix 8 Format of Cash Withdrawal Form

Appendix 9 Format of Pay-in-Slip

Appendix 10 Steps involved in book keeping

Annexure I : Trial Balance

Annexure II : Trading Account

Annexure III : Profit and Loss Account

Annexure IV : Balance Sheet

As envisaged under the Revival Package of GoI, NABARD in collaboration with

Applicability of universally accepted basic concepts and principles in the

Adoption of standard financial statements, viz., Balance Sheet, P&L A/c

List of a common set of General Ledger Heads of Account compatible with

Maintenance of minimum essential and Standard Books of Accounts

Preparation and processing of accounting transactions, and

Providing assurance that similar transactions will be accounted for

Transactions are accounted consistently and financial statements are

Clear understanding of book-keeping under Double Entry system of

Chart of Accounts is a listing of the names of the accounts that an

Ensure uniformity and common understanding of accounts;

Guide in the installation of accounting and internal control systems;

Enhance transparency; and

Facilitate the analysis and evaluation of financial and management

Paid up Capital Individual

RESERVES, FUNDS AND GRANTS

BORROWINGS FROM DCCBs/SCB

ST (SAO) / KCC Credit Limit

Adopted from Common Accounting System

Bills for Collection (Being Bills Receivable as per Contra)

BRANCH ADJUSTMENT ACCOUNT (Applicable to PACS that have more than

Interest Accrued on Deposits

Provision for PF / Gratuity / Bonus / Pension

Current Account with DCCB/SCB

Government and Trustee Securities

LOANS AND ADVANCES

ST (SAO) Loans / KCC Loans

Agricultural Inputs Fertilisers

Land and Buildings including Go downs

Interest Accrued but not due on Standard Loans

PROFIT AND LOSS ACCOUNT

ESTABLISHMENT AND OTHER EXPENSES

Salary and Allowances (including Contribution to PF, Bonus, Gratuity

Applicable to PACS under two-tier system

Depreciation in value of investments

PROFIT AND LOSS ACCOUNT

Interest on Loans and Advances